U.S. Presidents and Job Creation: Winners and Losers
How do U.S. presidents in the postwar period stack up against one another in terms of job growth during their time in office?
Starting with Harry Truman's second term beginning January 1949, there were twelve postwar presidents who served in office for periods ranging from less than three years - John F. Kennedy and Gerald Ford - to eight years: Dwight Eisenhower, Ronald Reagan, Bill Clinton, and George W. Bush.
The biggest rise in the net number of nonfarm jobs in the postwar era, 22.7 million, occurred during Clinton's years in office, from January 1993 to January 2001. Ronald Reagan came in a distant but respectable second at 16.1 million. In both cases the advantages of duration were evident. The next biggest job gains were under Lyndon Johnson, at 12.2 million, followed by Jimmy Carter at 10.3 million.
President Obama comes in last. Based on the latest Labor Department release of preliminary data for October, nonfarm jobs were up 194,000 since January 2009. George W. Bush has the second worst record, logging in only 1.1 million jobs during his two terms. Gerald Ford was third lowest with a 2.1 million increase.
Keep in mind that, in addition to duration in office, inherited trends and policies, wars, inflation, demographics, and other factors affect presidents' job records.
Adjusting for differences in the duration that presidents were in office can change the picture and makes for a fairer comparison. Let's look at the record of the average monthly change in jobs during the months that presidents served. Here, Bill Clinton again comes in first with an average monthly increase in jobs of 237,000. Jimmy Carter comes in a close second with an average monthly gain of 215,000 jobs despite double-digit inflation during his one term. Next comes Lyndon Johnston (197,000), then Ronald Reagan (168,000) followed by Richard Nixon (139,000).
President Obama is again at the end of the line, showing only an average of slightly over 4,000 jobs a month during his term to date. George W. Bush is second lowest with 11,000 jobs a month, and Dwight Eisenhower next with 37,000 jobs a month.
A fairer comparison yet would be based on percent changes in jobs rather than changes in the number of jobs. The size of the job market has tripled during the postwar period. So a given gain in the number of jobs early in the postwar period represents a more impressive showing than the same size increase in more recent years. We can adjust the rankings for a growing base by looking at what happens when jobs are expressed as average monthly percent changes (during months in office) at an annual rate.
Lo, the top ranking goes to Lyndon Johnson with an average monthly percent increase in jobs at an annual rate of 4.1 percent. This was during the Vietnam War. Jimmy Carter comes in second highest at 3.2 percent, which didn't help him to get re-elected. Harry Truman registers third at 3.0 percent, during the Korean War. Fourth is Bill Clinton at 2.6 percent.
Again, President Obama comes in last with a rate close to zero. George W. Bush is second lowest at 0.1 percent, then George H.W. Bush at 0.6 percent and Dwight Eisenhower at 0.9 percent.
In assessing the job market, it's not clear to what extent voters will focus on the uptick in last month's unemployment rate, the above-expected but still modest 171,000 October improvement in jobs, the 157,000 average monthly increase in jobs so far this year, or the poor showing overall during the president's first term. It's said that when hard times endure, people have long memories. If so, the election could carry a knock-out punch.