“It’s unbelievable the twilight zone that we’re sort of living in, where people just say things and it gets repeated”, Jeff Gundlach told CNBC’s Scott Wapner during a May 2019 interview. “I think probably we’re numb to that because of social media”.
Yes, “probably” we are “numb to it”. In fact, the public has become so detached from reality that voters are now willing to throw their support behind candidates espousing conspiracy theories that might very fairly be described as clinically delusional (I’m referring to Marjorie Taylor Greene).
With large swaths of the electorate now prepared to accept politicians who, if their public remarks truly reflect their beliefs, suffer from diagnosable psychosis, there is no hope that voters will parse economic claims for veracity. In the same interview cited above, Gundlach said the following of Donald Trump:
He keeps talking about how jobs have never been created so much — ever in history. Except for one little fact: If you take the number of months Trump’s been in office and take the average nonfarm payrolls and compare it to the same number of months at the end of the Obama presidency, there were more under Obama.
Fast forward a year and the US labor market collapsed under the weight of lockdown measures aimed at stopping the spread of a deadly pathogen.
That isn’t Trump’s fault. You can, of course, criticize the administration’s haphazard re-opening push, which almost all experts cite when explaining why the US continues to suffer in the pandemic even as every other developed nation managed to flatten their respective virus curves. But it wouldn’t be fair to blame Trump for the jobs apocalypse seen during March and April.
However, one should be extremely wary of what are sure to be spurious claims about the recovery as we head into the election. In an interview with Fox’s Sean Hannity on Wednesday night, Mike Pence made just such a claim.
“We’ve already created more jobs in the last three months than Joe Biden and Barack Obama created in their eight years in office”, Pence said.
Economists, analysts, market participants, and (let’s face it) anyone who is any semblance of intelligent, understands why that is a manifestly ridiculous claim.
First, many of the jobs Pence claims the administration “created” in May, June, and July, are actually just the same jobs that existed prior to the pandemic — employers are re-hiring based in part on government assistance and various schemes designed specifically to encourage businesses to call back employees let go during the crisis.
Make no mistake, that’s unequivocally a good thing. But to suggest it counts as “organic” (if you will) job creation is disingenuous in the extreme.
Beyond that, the idea that Pence would compare the snapback in the labor market following April’s epochal collapse to nearly a decade of steady job creation under the previous administration is so dubious — so laughably absurd — that one struggles to comprehend how any network television personality, even Hannity, could countenance such a claim.
In the simplest possible terms: the headline jobs numbers from the May, June, and July NFP reports were only possible because of how huge the preceding plunge was.
The figure (above) shows you the reality. The pandemic wiped away the entirety of the jobs gained during the longest expansion in US history. That expansion was, for the most part, presided over by Barack Obama and Joe Biden.
While you cannot blame Trump and Pence for the jobs lost to the pandemic, you can (at least partially, anyway) credit Obama and Biden for the jobs gained during the expansion. Pence’s remarks to Hannity represent a truly egregious attempt to distort reality and mislead the public.
Leaving the pandemic aside, the figure (below) strips away the spin to show you the real comparison between the Obama/Biden labor market during their second term and the Trump/Pence labor market.
Note that Trump has variously insisted that economic comparisons involving his presidency should include November and December of 2016 to account for the “Trump bump”. He also (rightly) says you cannot count the economic hit from the pandemic against him.
So, the visual simply takes the average monthly gain in nonfarm payrolls from November 2012 through October of 2016 and compares it to the average monthly gain from November 2016 through January of 2020.
That should clear up any “confusion” for Mike Pence.