Mar 7, 2008 12:00 pm US/Eastern
Economists Contradict Bush's Rosy Outlook
WASHINGTON (AP) ―
President Bush put the best face on Friday's grim employment report, claiming a recently passed economic stimulus package should provide a "booster shot" to an economy he acknowledged was in decline -- but on track, he said, to prosper in the future.
Economists, for the most part, don't share his rosy outlook.
The Labor Department reported Friday that the economy lost 63,000 payroll jobs in February, the deepest cut in five years, after losing 22,000 jobs in January. The February figure would have been even higher -- over 100,000 lost jobs in the private sector -- had it not been for an offsetting increase in government jobs of 38,000.
THE SPIN
Bush sought to ease fears that the U.S. is slipping into a recession, saying he is taking action to get the economy back on track.
"I know this is a difficult time for our economy, but we recognized the problem early and provided the economy with a booster shot," Bush told reporters at the White House on Friday. "We will begin to see the impact over the coming months."
"In the long run, we can have confidence that so long as we pursue pro-growth, low-tax policies that put faith in the American people, our economy will prosper," he said.
Bush also noted that "the unemployment rate improved to 4.8 percent."
A White House "fact sheet" boasts that the economy has added "more than 8.1 million jobs since August 2003."
In his remarks, Bush said the $152 billion stimulus package passed last month by Congress would give the economy a needed jolt. Rebate checks of $600 for individuals, $1,200 for couples, plus $300 each for dependent children for all but the highest-paid Americans will start appearing in consumers' mailboxes in May.
"We expect they will use it to boost consumer spending and that will spur job creation as well," Bush said.
THE FACTS
The "improvement" in the monthly unemployment rate to 4.8 percent is not really good news. The statistic was largely driven by the fact that so many adults have become discouraged and stopped looking for work, contributing to a drop in the total number of adults either employed or looking for work.
University of Maryland economist Peter Morici calculates that, factoring in the decline in adults looking for work, the unemployment rate is actually 6.8 percent.
As to job growth during Bush's term, do you wonder why the administration picked August 2003 as a starting point?
That's because it was a low point for job creation.
When Bush took office in January 2001, there were 132.5 million
non-farm workers. In August 2003, the number had fallen to 129.8 million. As of February, there are 138 million in the work force -- for a net increase since Bush took office of 5.5 million.
That barely keeps pace with population growth, economists suggest.
Many economists say the U.S. economy is already in recession -- even though it hasn't met the classic definition of two back-to-back quarters of declining gross domestic product -- and say the White House is trying to sugarcoat the statistics.
The U.S. economy grew at a 0.6 percent annual rate in the October-December 2007 quarter.
"They're certainly trying to put the best face on the situation. They're spinning it their way," said Standard and Poor's chief economist David Wyss, who suggests the economy dipped into recession sometime last month.
"I don't think they're falsifying the data. Presidents always play cheerleaders. I don't think I've ever heard a president say that we were in a recession until we were just about out of it," Wyss said.
Bush's top economic adviser, Edward Lazear, acknowledged Friday that the economy may dip into negative territory in the current quarter.
As for the stimulus package, economists say the rebates, in fact, could help keep the recession shallow, or even lift the economy out of recession. Some suggest, however, that such a "recovery" could be short-lived, with the economy slipping back into recession at the end of this year or early next year.
That could have an important bearing on the presidential election in November. Economic distress is generally seen as hurting Republican candidates more than Democrats.
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