Thumbs up?

April 04, 2004

PRESIDENT BUSH ended last week on a triumphant note, flashing the thumbs-up sign as he hit the campaign trail Friday with some just-released very good economic news: The U.S. economy created 308,000 jobs in March, the most since Bill Clinton was in office.

It was the first time in more than three years that the nation didn't lose manufacturing jobs. The Institute for Supply Management's index of manufacturing activity also showed growth in March for the 10th straight month. Moreover, weekly jobless claims, a layoff measure, are declining.

But amid these very welcome signs of life, this recovery remains painfully slow and the labor market weak. Mr. Bush cannot make a strong case for his administration's economic policies when you consider:

Even with March's new jobs, the unemployment rate actually rose from 5.6 percent to 5.7 percent (10.2 percent for blacks) - because of work-force growth. The March job surge, while healthy, essentially amounted to running in place.

The share of the unemployed out of work for at least 15 weeks grew in March, and the average duration of unemployment for those still looking for work rose to a record level, an average of almost 21 weeks. Also, a growing share of the unemployed have been out of a full-time job so long that they have taken part-time work or given up looking for work, thereby taking themselves off the unemployment rolls.

Any way you cut it, more than 2 million more Americans are out of work now than when Mr. Bush took office - far worse than his administration's rosy predictions and worse than during the last economic recovery in the early 1990s, under his father.

Nevertheless, Mr. Bush likely will tout Friday's job report as evidence that his record tax cuts are putting America back to work. It's true that lower taxes, inordinately low interest rates and an addiction to that easy credit have enabled Americans to shore up the economy with remarkable consumer spending. But again, look beyond the surface:

As fiscal stimulus, his tax cuts were a poorly targeted broad brush that delivered relatively little bang for the crushing government debt they will pass on to our children and theirs. More of this year's record U.S. budget deficit results from these cuts than from the war on terrorism or federal spending growth.

The president this weekend is touting his new "Jobs for the 21st Century" program. It's got the right focus - education - but it delivers too little, much too late: $500 million essentially split between high school programs and community college job-training programs. At the same time, his administration is cutting overall federal funding for work-force training, including more than $250 million from other community college job programs.

So let's hope we'll soon look back and note that March's job growth jump was indeed a turning of the corner for the nation's labor market. But that corner may yet be farther down the road than Mr. Bush would like.

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