Labor market experiences third month of healthy job growth
For the third consecutive month, jobs have grown as strongly as the norm for an economic recovery. The 248,000 jobs gained in May bring the total gains for the last three months up to 947,000. It would be a mistake, however, to attribute the healthy gains that started in March 2004 to the tax cut that took effect last July — the recent three-month gain of 0.73% is lower than the three-month rate that typically has occurred soon after a recession ends and usually lasts for about a full year.
Record-breaking job loss continues for women
The 2001 recession inaugurated the only period of sustained job loss for women in the last 40 years. Women workers lost over 300,000 jobs between the start of the recession in March 2001 and March 2004, a 0.5% decline in their employment level. Furthermore, women's employment-to-population ratio remains unusually low. The weakened employment outlook since March 2001 has continued to have an effect on women's labor force participation. By May 2004, this indicator had dropped by a full percentage point from its March 2001 level—from 60.2% to 59.2%. (For more details and charts, read the full analysis by the Institute for Women's Policy Research.)
Bush Administration's tax cuts not fulfilling job creation promises
The Bush Administration called the tax cut package, which was passed in May 2003 and took effect in July 2003, its "Jobs and Growth Plan." The president's economics staff, the Council of Economic Advisers (see background documents), projected that the plan would result in the creation of 5.5 million jobs by the end of 2004—306,000 new jobs each month, starting in July 2003. The CEA projected that, starting in July 2003, the economy would generate 228,000 jobs a month without a tax cut and 306,000 jobs a month with the tax cut. Thus, it projected that 3,366,000 would be created in the last 11 months. In fact, since the tax cuts took effect, jobs have grown by 1,365,000—two million fewer jobs than the administration projected would be created by enactment of its tax cuts.
Greatest sustained job loss since the Great Depression
Since the recession began 38 months ago in March 2001, 1.3 million jobs have disappeared, representing a 1.0% contraction. The Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression). In every previous episode of recession and job decline since 1939, the number of jobs had fully recovered to above the pre-recession peak within 31 months of the start of the recession. Today's labor market would have 5.3 million more jobs if employment had grown by the same 3.0% average gain for the last three recession cycles. The picture is worse for private-sector jobs, which have dropped by 1.9 million since March 2001, representing a 1.7% contraction. (See state data and organizations for more information on individual states.)
up to receive JobWatch bulletins by e-mail
Add JobWatch to your site
|Campaign for America's
© 2004 by The Economic Policy Institute. All rights reserved.