President Obama’s final economic numbers are in, and the results are impressive.
In December, the job market grew by 156,000 jobs. It was the 75th straight month of job growth, the longest growth streak since 1939.
The unemployment rate in December ticked up slightly to 4.7 percent from a low of 4.6 percent in November. But the underemployment (U-6) rate – which includes not only the out-of-work population but also counts people who could work but have stopped looking for a job – fell to 9.2 percent, the lowest since 2008.
Overall, the U.S. gained over 2 million new jobs in 2016. Ian Siegel, co-founder of ZipRecruiter, a job recruitment site, said:
“By just about any measure, 2016 was a banner year for the job market.”
Recovery Under Obama
During Obama’s presidency, the U.S. has gained 11.3 million jobs. By comparison, Obama’s predecessor, George W. Bush, added just 1.3 million jobs during his eight years in office.
When Obama took office at the height of the Great Recession, America was losing about 750,000 jobs per month. He inherited a 7.8 percent unemployment rate that quickly spiked to 10 percent in October 2009.
But the unemployment rate fell the following month, and over the next seven years, would decline by more than half. Obama celebrated his record in a public letter published last week:
“Businesses that were bleeding jobs unleashed the longest streak of job creation on record. The auto industry has roared its way back, saving one million jobs across the country and fueling a manufacturing sector that, after a decade of decline, has added new jobs for the first time since the 1990s. And wages have grown faster over the past few years than at any time in the past forty.”
All true. But most economists believe presidents have little impact on the economy. Private sector innovation and job creation are the cornerstones of a strong economy. The Federal Reserve determines U.S. monetary policy. And Congress decides how to tax and spend Treasury funds.
Still, Obama deserves at least some credit. His recovery plan played an important role in staunching job loss and getting the economy growing again. And the healthcare plan that bears his name – Obamacare – has created almost 3 million jobs in the healthcare industry alone.
The Trump Factor
But what about the other 8 million jobs? Are they any good? President-elect Donald Trump, who campaigned on a platform of economic populism, suggests they aren’t. Trump argues that wages are stagnant and the recovery overall is poor.
Trump is right about stagnant wages. But it’s misleading to suggest that poor wage growth is unique to Obama’s administration.
Real wages have been stagnant for years. Hourly pay continues to lag far behind growth in worker productivity. During the Obama administration, wages grew just 2 percent per year. But it remains doubtful that Trump is the man to reverse this trend.
Most of the jobs added over the past eight years were low-paying positions in retail, restaurants, and other service industries. But according to economist Joseph Brusuelas of accounting firm RSM, about half of the jobs added to the Obama economy belonged to the “high-wage” category and exceed the average middle-class American income.
Watch the video below for more on Obama’s economic legacy:
Featured image via YouTube video.