On a Friday morning in February 2009, the Labor Department issued its standard monthly readout on the state of the U.S. labor market. It was the first of 96 jobs reports to be issued during the Obama presidency, and it was a catastrophe.
“With Grim Job Loss Figures, No Sign That Worst Is Over” was the print headline for The New York Times. “598,000 Jobs Shed in Brutal January,” said The Washington Post.
There was considerably less hand-wringing upon the release of the final jobs report of the Obama years Friday, and for good reason. The nation added 156,000 jobs in December, and the unemployment rate was 4.7 percent, not the 7.9 percent reached eight years ago.
To be precise, that report from February 2009 covered the period shortly before President Barack Obama took office, and the state of the economy in the final days of his administration will be captured by numbers released early next month. But it is close enough to the end of the Obama era that it is hard to imagine any radical shifts in those numbers.
Granted, presidents have limited ability to shape the economy. Congress controls the power to tax and spend, and the Federal Reserve sets monetary policy. A president has only subtle ways of influencing either. Luck plays a big part in economic results, too; Bill Clinton didn’t invent the internet, but its advent helped drive a jobs boom during his presidency.
Still, with moving vans starting to pull up to the White House gates, it’s a fine time to look at how Obama’s jobs record stacks up against his predecessors. The short answer: The Obama years have been a gloomier period for U.S. workers than the those of Ronald Reagan or Clinton. But Obama’s record looks much better if you make adjustment for the fact that he took office in the middle of an economic free fall, or if you compare him with either President Bush.
— JOB GROWTH: The Obama era falls short
One of the simplest ways to measure employment is to look at the rate of job growth during a presidency. Here, the math is straightforward. With one month to go, the number of payroll jobs in the United States is up 8.4 percent since Obama took office. Of the past three two-term presidents, that falls considerably short of the levels reached by Reagan (17.7 percent) and Clinton (20.9 percent), but substantially better than the results achieved by George W. Bush (a gain of 1 percent).
There are also some ways in which this isn’t a fair comparison. That’s because job growth rates are heavily shaped by two things that presidents can’t control: the state of the economy when they take office, and demographic forces that shape the availability of workers.
Here, Reagan and Clinton had a big advantage. Both took office not long after a recession had ended, meaning that their job growth results were boosted by unemployed workers who were returning to the workforce. And both presided during a time when baby boomers were in prime working years and women were entering the workforce.
By contrast, both Bushes took office with the economy at full employment, when there was nowhere for job growth to go but down. And Obama took office during a period of economic disaster, with less-favorable demographics: Baby boomers are now retiring, and the proportion of women who seek to work is stable, not growing.
— UNEMPLOYMENT: High on average, a better hand-off
One way to filter out those effects is by looking at the unemployment rate, which captures only the share of people who are looking for a job who can’t find one.
The average jobless rate during the Obama presidency is quite high by modern standards, at 7.4 percent. Even amid the miserable job growth record of the George W. Bush administration, the jobless rate averaged only 5.2 percent. The sheer depth of the recession that Obama inherited, combined with the slow, long slog out of it over which he presided, ensured that the jobless rate was, on average, elevated through his presidency.
If you look not at the average but compare the economy a president inherited with the one he passed along to his successor, Obama’s record looks a great deal better. If the December jobless number is unchanged in January, Donald Trump will inherit among the lowest jobless rates of any new president in modern times. Only Richard Nixon and George W. Bush inherited a lower rate.
And the 3.1-percentage-point decline in joblessness over Obama’s eight years ties with Clinton for the steepest drop during a presidency in the post-World War II era.
— LABOR FORCE PARTICIPATION: Not just an Obama-era story
Looking only at the unemployment rate, especially at the tail end of the administration, may be too generous to the Obama record. That rate only counts people who are actively seeking work. And one of the big stories of the past several years has been a contraction in the share of Americans who even count themselves as part of the labor force.
But how to measure that? One way is to look at the share of the adult population that is working, or counts itself as part of the labor force. But if you do that, you fail to account for people who are not in the labor force for completely sensible reasons — because they are voluntarily retiring, or going to graduate school, and so on.
That’s why economists often look at “prime-age” labor force participation, only the share of people between ages of 25 and 54 who are either working or seeking work. But here also, it is tricky to compare shifts in recent years with earlier decades, when women were entering the work force at high rates. That shift, which took place roughly from the 1960s through 2000, fueled a boom in the rate of labor force participation that hasn’t continued in the past 16 years partly because most of the women who want to be part of the labor force already are.
But what if we look just at the labor force participation rate among prime-aged men? How do the Obama years stack up?
It’s pretty bad. The proportion of men 25 to 54 who are part of the labor force has fallen by 1.4 percentage points during the past eight years.
What is less widely understood, though, is that this shift isn’t some new phenomenon of the Obama era. That same measure fell by 1.7 percentage points during the eight years of George W. Bush’s presidency. Even during the boom years of the Clinton administration, it fell by 0.9 percentage points.
So what is the Obama jobs legacy?
The administration succeeded in ending the steepest recession in modern times and has presided over steady job growth for seven of its eight years — though less impressive than in some other recent administrations. The slow recovery meant an elevated unemployment rate, but Obama will hand off to his successor an economy near full employment, something only a few modern presidents have accomplished.