US President-elect Donald Trump will come to office in two weeks’ time with the promise to “create a dynamic booming economy that will create 25 million new jobs over the next decade.” He might struggle.
So far this has mostly taken the shape of tweeting at various companies planning to outsource production jobs to other countries, with a protectionist mix of tariff stick and tax giveaway carrot used to make companies an offer they can’t refuse.
Obama took office on 20 January 2009 and immediately had to start fighting the global financial crisis. These four graphs tell the story of jobs under Obama to mark the final non-farms payroll release of his eight-year tenure.
The unemployment rate
Few economic numbers are more important, and in few major economies has the recovery from the financial crisis been so complete. The unemployment rate stood at 4.6 per cent in August 2007 under George W. Bush.
It soared during the crisis, but has since steadily fallen back to the same sustained level at the end of 2016. A deep crisis did not turn into a lasting depression.
Wage growth suffered a pronounced dip as the financial crisis took hold – which is hardly surprising.
However, in the latter half of Obama’s presidency wage growth has started to trend higher, but still remains below the levels the US worker had been accustomed to over decades.
As unemployment soared in 2008 the total number of employed workers plummeted to 138m, out of the total population at that time of 306m.
Yet in the seven years since the US has got back on track, with the number of Americans in employment finally surpassing 2007 levels in 2014. Since then the number has continued to rise almost without interruption.
Labour force participation
And yet Trump still won the presidency. With the jobs market threatening to reach full employment – where workers are being used in the most efficient way possible – the level of economic disillusion might be puzzling.
The graph that offers one of the most likely explanations is the labour force participation. By this measure, the last decade has been disastrous for the US – and Trump’s campaign seized on it as their concrete measure of US economic decline.
If the US President were elected by the labour force alone things might have been different, but politicians everywhere will see the lesson here: focusing on headline rates doesn’t necessarily win elections.