THE RAW DEAL: John Kerry's Economic Pessimism
"Only John Kerry's campaign would see bad news in the creation of 288,000 jobs last month. America's economy is strong and getting stronger because of President Bush's steady leadership, which has helped create more than one million jobs over the past eight months. The Kerry campaign's dismay over the strongest back-to-back monthly job gains in four years shows how out of touch it is with America."
- Steve Schmidt, Bush-Cheney '04 Spokesman
JOHN KERRY'S CAMPAIGN RHETORIC TALKS DOWN THE ECONOMY…
Kerry Advisor Says America Has A "Long Way To Climb." Kerry economic advisor Gene Sperling: "Well, try to get over your surprise, but here is the facts: we're in a historically deep hole on job performance. And these were a couple of steps up, but we got a long way to climb our way out. … It has a long, long way before you would say there has been a good economic or job performance over these last four years." (CNBC's "Squawk Box," 5/7/04)
… BUT THE REALITY IS THAT AMERICA'S ECONOMY IS STRONG AND GETTING STRONGER
288,000 Jobs Created Last Month. "U.S. employment surged for a second straight month during April, adding another 288,000 to payrolls, as jobs were created in nearly every sector at a pace that handily outstripped expectations, a Labor Department report on Friday said." ("Job Growth Strong For Second Month," Reuters, 5/7/04)
March and April: The Strongest Back-To-Back Monthly Gains In Four Years; February And March Jobs Numbers Revised Up. "Adding to evidence a revitalized labor market may take some sizzle from the jobs issue ahead of November presidential elections, the government revised up its estimates for job creation in both February and March. Labor said 83,000 jobs were added in February and 337,000 in March instead of 46,000 and 308,000 respectively it had previously reported. The back-to-back monthly gains in March and April were the strongest in four years, the department said." ("Job Growth Strong For Second Month," Reuters, 5/7/04)
Unemployment Down To 5.6 Percent. "In addition to the surprisingly robust job growth, the unemployment rate dipped to 5.6 percent. Wall Street economists had forecast 173,000 new jobs would be created in April and the unemployment rate would be unchanged at 5.7 percent." ("Job Growth Strong For Second Month," Reuters, 5/7/04)
Manufacturers Added Jobs For A Third Straight Month, After Revisions To February And March. ("U.S. April Payrolls Rise 288,000; Jobless Rate Falls to 5.6%," Bloomberg, 5/7/04)
Employment Up 1.1 Million Since August 2003. "'Since August 2003, payroll employment has risen by 1.1 million,' said Kathleen Utgoff, Bureau of Labor Statistics commissioner. 'In April, job growth was widespread for the second consecutive month.'" ("Job Growth Strong For Second Month," Reuters, 5/7/04)
Job Growth Higher And Unemployment Lower Than Expected. "Economists had expected payrolls would rise by 170,000 last month following a previously reported increase of 308,000 in March, according to the median of 75 forecasts in a Bloomberg News survey. The highest estimate was a 250,000 increase. They projected the unemployment rate would hold at 5.7 percent." ("U.S. April Payrolls Rise 288,000; Jobless Rate Falls to 5.6%," Bloomberg, 5/7/04)
217,000 New Jobs Per Month This Year. "So far this year, job gains have averaged 217,000 a month, more than enough to absorb new entrants into the labor force. Economists estimate that it takes gains from 125,000 to 150,000 to accommodate growth in the labor force." ("U.S. April Payrolls Rise 288,000; Jobless Rate Falls to 5.6%," Bloomberg, 5/7/04)
Incomes Increased. "Incomes increased last month. Workers' average hourly earnings rose 0.3 percent, or 5 cents, after a 0.1 percent increase the previous month. Economists had expected a 0.2 percent increase in hourly wages. Average weekly earnings rose to $525.38 last month from $523.70 in March." ("U.S. April Payrolls Rise 288,000; Jobless Rate Falls to 5.6%," Bloomberg, 5/7/04)
First-quarter Profits Increased. "First-quarter profit for S&P 500 companies increased 26.8 percent, based on results for 443 members that have reported. That's double the 13.4 percent forecast on Jan. 1, according to Thomson Financial." ("U.S. April Payrolls Rise 288,000; Jobless Rate Falls to 5.6%," Bloomberg, 5/7/04)
Rising Consumer Confidence. The ABC/Money poll released on May 4, shows that consumer confidence jumped to its best level in nearly three months. The survey’s buying gauge also moved upward. The University of Michigan consumer sentiment index for April registered a solid 94.2, up from an initial reading of 93.2. (“Confidence Maintains Momentum,” ABC News, 5/5/04; Economy.com)
Accelerating Manufacturing And Construction. The Institute of Supply Management reported that its April index of manufacturing activity registered a strong 62.4 reading, with both the production and employment components rising above the previous month’s numbers. New orders at U.S. factories jumped 4.3 percent in March, the biggest increase since July 2002. Orders for durable goods jumped 5 percent, on top of a strong 3.9 percent gain in February. Construction spending increased 1.5 percent in March, three times the forecasted gain. (Economy.com)
Higher Service Sector Activity in April. The Institute of Supply management’s index of service sector activity jumped to a record high in April and its index of new hiring rose to the highest level since November 2000. (Economy.com)
Rising Incomes. Real disposable personal income increased 4.3 percent annual pace in the first quarter, up from 2.6 percent for the four quarters of 2003. The acceleration was due in part to faster growth in wages and salaries and a decline in taxes. (Bureau of Economic Analysis)
More Consumer Spending. Consumer spending rose at a 3.8 percent annual rate in the first quarter, following a 3.2 percent pace the previous three months. (Bureau of Economic Analysis)
Solid Economic Trajectory. The first quarter’s advanced estimate of 4.2 percent GDP growth yields the best three consecutive quarters of economic growth in twenty years. Economists surveyed by Bloomberg predict that the economy will grow at a better than 4.5 percent pace for the rest of the year. (Bureau of Economic Analysis; Neil Irwin, "Growth Projected For Region's Economy," The Washington Post, 3/25/04)
