Point of Inflection
When the most recent jobs report came out a week ago, Speaker of the House Nancy Pelosi’s (D-CA) office circulated a striking chart showing the number of jobs the American economy lost each month since 2007. The months of George W. Bush’s presidency are in red, and the months after Barack Obama assumed the presidency are in blue. What’s striking about the chart is where it begins to turn around: the economy lost steadily fewer jobs each month after President Obama took office in January of 2009.
The first thing to notice, of course, is that the economy did continue to lose jobs after President Obama took office. In fact, employment decreased in all but one of the months Obama has been in office. What the chart shows is that the rate of job loss slowed when he took office—it’s a second derivative effect. It certainly doesn’t show that the economy is necessarily improving in any simple way. In a sense, it actually confirms that for many of us things have continued to get worse.
It’s also not clear that the President Obama can take full credit for the turnaround. The economy was probably beginning to bottom out by the end of 2008 anyway, and Congress had begun to act before Obama took office. In any case, the turnaround may be as much due to to the change of mood brought on by the election of a popular new president as by any of his actual policies.
Nevertheless, it is striking that the rate of job loss increased steadily throughout the last year of Bush’s presidency, but slowed steadily once Obama became president. Even if Obama can’t take complete credit for the turnaround, it does suggest that his stimulus package did in fact help save jobs. It’s also worth noting where the chart begins and ends. The economy began shedding jobs before the collapse of Bear Stearns in March of 2008, which suggests that our economic problems under the Bush administration went beyond the financial crisis. At the other end of the chart—where we are today—the economy has practically stopped shedding jobs. If the trend continues, the real recovery may finally be about to begin.