Is the economy getting better? Depends whether you think like an Obama or a Romney (Interactive map)

By Chris Wilson

There's an old joke in math circles about Richard Nixon that goes like this:

"In the fall of 1972, President Nixon announced that the rate of increase of inflation was decreasing. This was the first time a sitting president used the third derivative to advance his case for reelection."

(A derivative, one recalls, is a rate of change of a value.Nixon was saying that the rising price of goods and services—inflation, our first derivative—was itself rising—second derivative—but that the rate at which it was increasing was on the decline—third derivative.)

Historians (Wikipedia) trace this observation to the October 1996 edition of the "Notices of the American Mathematical Society," in which editor Hugo Rossi wondered if voters fell for it:

"Was President Nixon telling us that the economy was getting better? Did his listeners understand that in fact the inflation rate was still increasing and thus the economy still worsening?"

When it comes to economic data, there is almost always a time frame and a measure of calculus that can make the news sound good. The 2012 election arguably hinged on whether voters saw the economy in gross terms—how many total jobs were being created—or as a rate of change—how quickly the economy was improving. In the first presidential debate, President Barack Obama emphasized the former: "Over the last 30 months, we've seen 5 million jobs in the private sector created. "By the third debate, Republican nominee Mitt Romney was mournfully trumpeting the latter: "You can't have an economy that over the last three years keeps slowing down its growth rate." (That's a second derivative, for those of you keeping score at home.)

This is not your basic "lies, damn lies, statistics" situation. It's a foundational question about how far back our memories go when judging the health of the economy, and how far forward our imaginations go when projecting current trends.

Last week, the Census released an incredibly detailed set of figures on the number of people employed in over 1,500 industries in 2011. This dataset, called "County Business Patterns," is an annual survey of just about every sector of the U.S. economy, with the notable exception of government employees and some agricultural workers.

The absolute figures in this sort of data can be hard to make sense of if, like me, you are not an economist. Is the fact that 504 people were employed in the formal wear and costume rental business in Illinois in 2011 good news or bad news? Without some specific knowledge of the industry, the easiest thing to do is look at how much employment figures have changed over time. As it turns out, the formal wear rental business shrunk by 25 percent from 2010 to 2011, according to the Census data.

In the following interactive map, you can compare any two years of data for any industry and see how they measure up. Use the slider at the bottom to change the time frame and use the menu to select an industry. You can type in a few letters of the word you're looking for to narrow down this long list.

You can also toggle between viewing the map in terms of total jobs gained or lost, or as percentages—something like the "Obama View"and the "Romney View," to put it crudely.

To see the epitome of the Romney View, select "Total for all sectors" on the menu and set the time frame at 2008 to 2011. Whether you look at totals or percentages, you will find that only two states are in a better position today than they were before the worst of the recession hit: North Dakota and Alaska. This can largely be attributed to fossil fuels.

For a happier picture, just drag the left handle of the slider to 2010. For the most-recent two years of data, all but nine states have added jobs after shedding them like the plague the previous two years.(You can drag the blue region between the handles on the slider to move both at once.)

Think creatively if you can't find a specific industry; the government often words things very precisely. If you're worried about your friends at Yahoo News, for example, search for "Internet publishing." (Though this one is a bit misleading since the data doesn't show up until 2008. You have to drag the leftmost handle on the slider to 2009 or 2010 to see a real effect.)

Extra credit: How many anti-recession industries can you find, which show growth when the rest of the country shows decline? For example: Set the slider to 2008-2011 and select "Repossession services." Found a good one? Let me know: @chriswilsondc.

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You'll see some employment figures as a range, like 20-49.This happens when the Census is blurring data to protect the privacy of a company whose payroll could otherwise be imputed from the data. For the purposes of comparison, this map assumes the lower value. Thanks to the several different employees of the Census County Business Patterns office who took my calls to explain this. Questions? cewilson@yahoo-inc.com.Want to try it at home? My source code is on Github.

View the original article here

New jobs and energy gains helping lift US economy

WASHINGTON (AP) — A stronger-than-expected April rebound in job creation and recent dramatic discoveries of vast U.S. oil and gas reserves are helping to lift the American economy out its long funk.

The economic good news is also drawing attention to the importance of private-sector innovation rather than government policy in fostering growth.

The Labor Department's report that payrolls expanded by 165,000 jobs last month and the unemployment rate declined to a four-year low of 7.5 percent does not represent explosive job growth by any measure.

Yet the report offered a big sigh of relief to President Barack Obama and his Democratic allies in Congress.

It also may help blunt Republican criticism of Obama's policies and make it easier for him to give more attention to other issues on his agenda, including immigration, gun control and global warming.

At the same time, it provided the GOP with more support for their call for a smaller government and fewer regulations on business.

The recent jobs improvements were mostly driven by private-sector gains independent of action by the president and Congress.

Most legislative fiscal stimulus programs, begun in 2008 under President George W. Bush and expanded under Obama, have run their course. The Federal Reserve, however, continues to stimulate the economy by holding down interest rates and effectively printing money to buy government and mortgage-related bonds.

In fact, the report showed employer confidence about the economic outlook even in the face of new federal budget cuts. Economists widely agree that job gains would have been bigger were it not for the automatic across-the-board cuts that are beginning to take an $85 billion bite out of government spending.

House Speaker John Boehner, R-Ohio, said that while the report had "some good news" on the jobs front, it was still important to "focus on growing our economy rather than growing more government." He said that includes "expanding our energy production."

The energy sector plays a major role in global economic growth and recovery.

Recent discoveries have put the United States on track to become the world's largest producer of oil and natural gas in a few years. At the same time, oil imports have fallen to a 17-year low.

The energy breakthroughs have come despite Obama's heavy emphasis on promoting renewable clean-energy sources, such as wind and solar power, for the future.

In the months and years ahead, domestic energy production "is going to be a real driver of economic growth," said economist Douglas Holtz-Eakin, a former director of the Congressional Budget Office and chief economic adviser to Sen. John McCain's 2008 presidential campaign.

These energy gains, while not that big yet, will be reflected in more jobs at drilling and other energy work sites, reduced manufacturing costs and improvements in the nation's balance of trade, said Holtz-Eakin, now head of the American Action Forum, a conservative public policy institute.

"There's a lot of things in this jobs report one could like. But it's also something that leaves you with a long way to go."

It's hard to appreciate when you're in the grips of one, but recessions always come to an end. Recoveries always eventually follow, obeying the physics of business cycles.

But this recovery has been agonizingly shallow, given that the recession officially ended way back in mid-2009. Even at 7.5 percent, the jobless rate hovers well above pre-recession levels.

Even at the improved pace of job creation over the past six months, it will still take until early 2018, five more years, to get back to the more normal unemployment rate of 5 percent or less that prevailed before the recession began in late 2007, said economist Heidi Shierholz of the labor-oriented Economic Policy Institute.

"This is one of those reports that is totally context driven. In good times, the 165,000 new jobs would be fine, but nothing to write home about," she said.

"It's not bad. But we should have added over 6 million jobs since December 2007. Instead, we're down 2.6 million jobs," she said. "There's a big disconnect between people who are just happy that job growth was better than their expectations and what the report really says about where the labor market is."

Even so, stocks soared on cue, with the Dow industrials on Friday briefly rising above 15,000 for the first time before falling back a bit to close at 14,974, still a record close.

The jobs report also reflected a recovering housing industry. But not all sectors were up. Manufacturing, for instance, was flat.

While most energy-related sectors may be on the rise and new technological developments are "promising," the benefits to manufacturers will be muted because "U.S. manufacturing has become so much less energy intensive overall in recent years," said Alan Tonelson of the U.S. Business and Industry Council, which represents close to 2,000 mainly family-owned manufacturing companies.

Tonelson worries about foreign trade barriers, continued high levels of government spending despite recent cutbacks, and the Fed's continuing efforts to stimulate growth by printing money.

"Debt-led growth never ends well," he said.

Still, the latest jobs report gave the administration a big dose of good news, even as officials agreed there was still far to go.

"The economy has now added private-sector jobs every month for 38 straight months, and a total of 6.8 million jobs," said Alan Krueger, chairman of the White House Council of Economic Advisers.

"It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class as we continue to dig our way out."

___

Follow Tom Raum on Twitter: http://www.twitter.com/tomraum

View the original article here

New jobs and energy gains helping lift US economy

WASHINGTON (AP) — A stronger-than-expected April rebound in job creation and recent dramatic discoveries of vast U.S. oil and gas reserves are helping to lift the American economy out its long funk.

The economic good news is also drawing attention to the importance of private-sector innovation rather than government policy in fostering growth.

The Labor Department's report that payrolls expanded by 165,000 jobs last month and the unemployment rate declined to a four-year low of 7.5 percent does not represent explosive job growth by any measure.

Yet the report offered a big sigh of relief to President Barack Obama and his Democratic allies in Congress.

It also may help blunt Republican criticism of Obama's policies and make it easier for him to give more attention to other issues on his agenda, including immigration, gun control and global warming.

At the same time, it provided the GOP with more support for their call for a smaller government and fewer regulations on business.

The recent jobs improvements were mostly driven by private-sector gains independent of action by the president and Congress.

Most legislative fiscal stimulus programs, begun in 2008 under President George W. Bush and expanded under Obama, have run their course. The Federal Reserve, however, continues to stimulate the economy by holding down interest rates and effectively printing money to buy government and mortgage-related bonds.

In fact, the report showed employer confidence about the economic outlook even in the face of new federal budget cuts. Economists widely agree that job gains would have been bigger were it not for the automatic across-the-board cuts that are beginning to take an $85 billion bite out of government spending.

House Speaker John Boehner, R-Ohio, said that while the report had "some good news" on the jobs front, it was still important to "focus on growing our economy rather than growing more government." He said that includes "expanding our energy production."

The energy sector plays a major role in global economic growth and recovery.

Recent discoveries have put the United States on track to become the world's largest producer of oil and natural gas in a few years. At the same time, oil imports have fallen to a 17-year low.

The energy breakthroughs have come despite Obama's heavy emphasis on promoting renewable clean-energy sources, such as wind and solar power, for the future.

In the months and years ahead, domestic energy production "is going to be a real driver of economic growth," said economist Douglas Holtz-Eakin, a former director of the Congressional Budget Office and chief economic adviser to Sen. John McCain's 2008 presidential campaign.

These energy gains, while not that big yet, will be reflected in more jobs at drilling and other energy work sites, reduced manufacturing costs and improvements in the nation's balance of trade, said Holtz-Eakin, now head of the American Action Forum, a conservative public policy institute.

"There's a lot of things in this jobs report one could like. But it's also something that leaves you with a long way to go."

It's hard to appreciate when you're in the grips of one, but recessions always come to an end. Recoveries always eventually follow, obeying the physics of business cycles.

But this recovery has been agonizingly shallow, given that the recession officially ended way back in mid-2009. Even at 7.5 percent, the jobless rate hovers well above pre-recession levels.

Even at the improved pace of job creation over the past six months, it will still take until early 2018, five more years, to get back to the more normal unemployment rate of 5 percent or less that prevailed before the recession began in late 2007, said economist Heidi Shierholz of the labor-oriented Economic Policy Institute.

"This is one of those reports that is totally context driven. In good times, the 165,000 new jobs would be fine, but nothing to write home about," she said.

"It's not bad. But we should have added over 6 million jobs since December 2007. Instead, we're down 2.6 million jobs," she said. "There's a big disconnect between people who are just happy that job growth was better than their expectations and what the report really says about where the labor market is."

Even so, stocks soared on cue, with the Dow industrials on Friday briefly rising above 15,000 for the first time before falling back a bit to close at 14,974, still a record close.

The jobs report also reflected a recovering housing industry. But not all sectors were up. Manufacturing, for instance, was flat.

While most energy-related sectors may be on the rise and new technological developments are "promising," the benefits to manufacturers will be muted because "U.S. manufacturing has become so much less energy intensive overall in recent years," said Alan Tonelson of the U.S. Business and Industry Council, which represents close to 2,000 mainly family-owned manufacturing companies.

Tonelson worries about foreign trade barriers, continued high levels of government spending despite recent cutbacks, and the Fed's continuing efforts to stimulate growth by printing money.

"Debt-led growth never ends well," he said.

Still, the latest jobs report gave the administration a big dose of good news, even as officials agreed there was still far to go.

"The economy has now added private-sector jobs every month for 38 straight months, and a total of 6.8 million jobs," said Alan Krueger, chairman of the White House Council of Economic Advisers.

"It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class as we continue to dig our way out."

___

Follow Tom Raum on Twitter: http://www.twitter.com/tomraum

View the original article here