When all you read is gloom, turn here for a much different perspective.

Saturday, December 5, 2009

Obama's Brilliant Jobs Move

President Obama convened a "jobs summit" at the White House Thursday morning. It was likely one of the more brilliant moves of his presidency.

One of the most notable early promises from Obama was that the massive stimulus measure signed into law earlier this year would save or create 3.5M American jobs. The President and the White House have continued to defend that claim vigorously since stimulus spending began.

The biggest challenge for them has been that even though spending has reduced the number of jobs losses, net job losses have continued and thus the unemployment rate continued to rise... until this week.

For months business groups, financial blogs, labor leaders, think tanks and lawmakers were lining up to offer the President their ideas about creating jobs. The Left arguing that more spending is required, while those on the Right argue that the government intervention and spending programs have been wrong all along.

So why hold a "jobs summit," and underscore a 10.2% unemployment rate right at the dawn of an congressional election year? The move is brilliantly timed.

Based on the job loss data that we've been tracking here, we've said repeatedly that a return to net jobs growth will be real and measurable in the data by Christmas. This week showed more evidence that economic activity has now resumed to such a level that the unemployment rate has peaked, joblessness has started to fall, and jobs growth is now resuming.

So the timing could not have been better for Obama to go on record on Thursday: "We are going to be bringing together people from all across the country -- business, labor, academics, not-for-profits, entrepreneurs, small and large businesses -- to explore how we can jump-start the hiring that typically lags behind economic growth, but we don't want to wait. We want to see if we can accelerate it."

The summit came one day ahead of the government's latest jobs report, which showed job losses all but ended during November and that the unemployment rate is now starting to fall from its peak level of 10.2%. Congressional Democrats who have been bracing for a rough election year in 2010 (owing in part to the weak jobs market), could not be more pleased to see a trend line that now clearly points to jobs creation in the months leading up to those elections.

The $787 billion economic stimulus package has now conservatively saved more than one million jobs -- a point highlighted again by Vice President Joe Biden on Tuesday. And more projects are in the pipeline that will put Americans to back to work, including very exciting new infrastructure, Internet broadband, and high-speed rail initiatives.

As these new programs actually ramp up, as economic recovery continues to gain momentum, and as jobs growth resumes, Obama can now point to a stimulus plan that got the economy back on track, a TARP program that saved our large banks, and a December 2009 jobs summit that was the catalyst to employment creation in 2010. Perfectly timed.


  1. GNE,

    What about the claim that the decrease in job losses is due to seasonal hiring? Also, although the Fed report states that commercial construction job loss is declining, my contacts in the industry, as well as ENR magazine, are very concerned that with the back log of construction projects drying up and no new ones coming on line (the infrastructure projects are few and far between and don't use as many workers as commercial projects do), there will be another waive of layoffs in the construction industry. I hope other sectors pick up but I thought the ISM service sector report noted a weaker job market for November.

  2. Bill,

    Since about the Apr time-frame economic trending has all been in the positive direction. (see the graph in this article as well as the ISM charts that I've published periodically since earlier in the year.) I'll admit that the November jobs number was better than even I expected. My chart after the October numbers were released showed a predicted job loss of 100,000 for November and jobs returning to growth by Christmas. The real numbers beat even that optimistic view with the unemployment rate beginning to also decline...

    So even if there are some seasonal contributions to the numbers, the trending continues positive since the stimulus efforts began and those positive trends are likely well into 2010.

    The $700B+ in spend may have been completely allocated and encumbered for use, but the actually spending and use of those funds are not even close to complete. Look for continued growth in the ISM indexes well into 2010... I'd say that given the Atlanta Fed indications from the beige book survey, it is likely you will begin to see some positive pickup in the commercial sector in Q1... or at the very least a very firm bottom.



We want to hear from you, and you know you want to say something...

FREE Good News delivered to your Email Inbox (With Easy Unsubscribe at Any Time)

Enter your email address:

Delivered by FeedBurner

If you prefer RSS feed subscription...

If you prefer RSS feed subscription...
...Click This Icon For The RSS Feed