4 Facts About Obama’s Unemployment Record (and How to Read the Data)

President Obama is leaving office in just a few weeks, so now’s a good time to reflect on the outgoing administration and its policies. Where do we stand compared with eight years ago, in terms of the economy and the job market? Let’s look at a few facts about Obama’s unemployment record to see how far we’ve come and what needs to happen next.

But first, let’s talk about how the Bureau of Labor Statistics measures unemployment.

Throughout his campaign, President-elect Donald Trump claimed that unemployment data provided by the Bureau of Labor Statistics was bogus. Back in September, when the Bureau of Labor Statistics put the unemployment rate at 5 percent, Trump went so far as to say that the real unemployment rate could be as high as 20 to 42 percent.

“The unemployment number, as you know, is totally fiction,” Trump said at a rally last month, as reported by The Washington Post. “If you look for a job for six months and then you give up, they consider you give up [sic]. You just give up. You go home. You say, ‘Darling, I can’t get a job.’ They consider you statistically employed. It’s not the way. But don’t worry about it because it’s going to take care of itself pretty quickly.”

Is the Unemployment Rate a Fiction?

The Bureau of Labor Statistics’ measurement of unemployment is accurate — but it is slightly more complicated than just measuring Americans who are not currently working. The BLS defines unemployed workers thusly:

People are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:

• Contacting:
  • An employer directly or having a job interview
  • A public or private employment agency
  • Friends or relatives
  • A school or university employment center
• Submitting resumes or filling out applications
• Placing or answering job advertisements
• Checking union or professional registers
• Some other means of active job search

The only way Trump’s numbers could be considered more accurate than the Bureau of Labor Statistics’ is if we look at all Americans who aren’t working. The problem with that is that “not working” isn’t the same as “looking for work and not finding it.” Trump’s tally would have to include, for example, stay-at-home parents and retired persons among others who are not looking for work.

The labor force participation rate has dropped during Obama’s presidency, from 66 percent to 62.7 percent. This change is concerning, but it doesn’t mean that unemployment data is inaccurate or even misleading — certainly not to the tune of a 42 percent unemployment rate. (There are some countries that have unemployment rates this dire. The economic landscape of these countries should serve as further evidence that the U.S. just simply doesn’t have that level of unemployment. Haiti, for example, has a better unemployment rate than that at 40.6 percent.)

Bottom line: the unemployment rate is very different from the labor participation rate.

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With that said, Trump isn’t the only critic of how unemployment is measured. The Economic Policy Institute, a left-leaning think tank, notes that the Labor Department doesn’t include “missing workers” in its tally: “In today’s labor market, the unemployment rate drastically understates the weakness of job opportunities. This is due to the existence of a large pool of missing workers–potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job.” Including those missing workers, the EPI puts the current unemployment rate at 6 percent.

So, there are measures of unemployment that put the rate at higher than the official numbers — but nowhere near the catastrophic levels Trump has claimed. Now we’re on the same page about how to read the unemployment data, let’s take a look at the past eight years and see where we are today.

Facts about President Obama’s unemployment record:

1. The jobless rate for November is the lowest it’s been since August of 2007.

The unemployment rate for November 2016 was 4.6 percent, according to the Bureau of Labor Statistics. The gains occurred primarily in professional and business services and in healthcare. The number of unemployed persons declined by more than 387,000 from the previous month.

2. There are fewer and fewer manufacturing jobs available.

Prior to his reelection in 2012, Obama pledged to create 1 million manufacturing jobs by the end of 2016. Per Politifact, he succeeded in creating only 297,000.

However, that trend is unlikely to reverse during Trump’s tenure in office. Even if the incoming administration rolls back trade regulations and breaks or remakes trade deals, that probably won’t change. Why? Automation. While the jury’s still out on whether artificial intelligence will create or destroy more jobs as a net total, it’s almost certainly bad news for those whose careers depend on factory work.

3. The economy is improving now. When Obama took office, it was declining.

The November before President Obama took office, employers reported cutting more than 500,000 jobs, which was the largest decline in decades. President-elect Trump, however, will inherit an economy that’s on an upswing. Private-sector jobs have increased for 80 months, wage growth is running ahead of inflation, and consumer confidence is higher than it’s been in nearly a decade.

“It was an utterly terrifying time, the likes of which none of us had ever seen in our lifetimes,” Jason Furman, the chairman of President Obama’s Council of Economic Advisors, told The New York Times. “…[T]he economy was following the same trajectory that it did at the beginning of the Great Depression.” Today, Furman says, “the economy today is healthy and improving.”

4. The unemployment rate has fallen for minorities over the last year, but there is still a pay gap.

The unemployment rate varies significantly when figures are broken down by gender and/or racial demographics. When we look at data from the past year, we can see that unemployment rates have improved, although unemployment rates are still much higher for Black or African-American workers and Hispanic or Latino workers.

The unemployment rate for white workers was 4.1 percent in November of 2015. In November of 2016, it was 4.2 percent. The rate for black or African American workers was 9.1 percent a year ago, and it’s 8.1 percent according to the latest data this past November. Hispanic or Latino workers’ unemployment rate was 6.3 percent a year ago, and now it’s 5.7 percent.

The Obama administration emphasized the importance of leveling the playing field for all workers, but there is still a long way to go.

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