This morning the Labor Department reported that the economy added a mere 114,000 jobs in September. (See here for the story) That's less than half the number of jobs the economy added in September, 1984, during the Reagan Recovery, when employment increased by 240,000. (Go to this website and insert the appropriate dates to obtain the September, 1984 figures.) This poor showing is no surprise, given that real GDP is growing at a snail's pace: annual rates of 2.0 percent and 1.3 percent in the first and second quarters of 2012, respectively (see this Department of Labor Press Release for the GDP figures), compared to real economic growth of 6.8 percent in 1984.
Moreover, as previously explained on this blog with respect to prior months (see also here and here), the actual jobs gap between the Reagan and Obama recoveries for this most recent month is even larger than these data suggest. After all, the 1984 labor force was significantly smaller than it is today, with the result that the addition of 240,000 new jobs reflected a larger rate of employment growth than would a similar increase today. Thus, to replicate the September, 1984 rate of job grow, the economy should have created over 300,000 jobs in September, 2012. (See here for an example of such a calculation in a prior month.) Thus, the jobs gap between the Obama and Reagan recoveries, which stood at 1.7 million for the months of April through August, is still growing.
Moreover, as previously explained on this blog with respect to prior months (see also here and here), the actual jobs gap between the Reagan and Obama recoveries for this most recent month is even larger than these data suggest. After all, the 1984 labor force was significantly smaller than it is today, with the result that the addition of 240,000 new jobs reflected a larger rate of employment growth than would a similar increase today. Thus, to replicate the September, 1984 rate of job grow, the economy should have created over 300,000 jobs in September, 2012. (See here for an example of such a calculation in a prior month.) Thus, the jobs gap between the Obama and Reagan recoveries, which stood at 1.7 million for the months of April through August, is still growing.
