Video: White House shifts on jobs numbers

msnbc.com staff and news service reports
updated 2/18/2004 8:04:40 PM ET 2004-02-19T01:04:40

President Bush edged away Wednesday from his own administration's prediction that the U.S. economy will add 2.6 million new jobs before the end of this year.

While still upbeat, Bush tempered his tone about the prospects for a rebound in the lagging labor market. He would not endorse the specific forecast released last week by Bush's own Council of Economic Advisers, instead saying he was pleased with the creation of 366,000 new jobs since last summer.

"I think the economy's growing, and I think it's going to get stronger," Bush said.

"But," he added, "I'm mindful there are still people looking for work."

His comments were the latest in a series of quiet steps by the administration to cautiously back away from specific predictions on the economy that many economists believe to be too rosy.

First Cabinet officials, and then the White House, have tiptoed away from the 2.6 million figure.

"The president is interested in actual jobs being created rather than economic modeling," White House spokesman Scott McClellan said.

"We are interested in reality," added McClellan, who quoted the president saying: "I'm not a statistician. I'm not a predictor."

The president's political hopes for this year's elections rest largely on his promises of an economic rebound. While broader measures of the economy have improved in the past couple years, few of the more than 2.1 million jobs lost during Bush's time in office have been added back to payrolls, giving him the worst record for job creation of any president since Herbert Hoover.

With so much on the line, there has been disagreement within the administration about the proper message to take on jobs recovery. Neither Commerce Secretary Don Evans nor Treasury Secretary John Snow ever endorsed the prediction of 2.6 million jobs, White House sources said.

By late Wednesday, even Gregory Mankiw, chairman of Bush's economic council and an author of the jobs forecast, had retrenched on his own predictions.

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“We don’t have a projection today ... It will be months before we sit down and go through that exercise again,” Mankiw told Reuters. “We still expect 2004 to be a robust year. We still expect jobs to be created. But we have not put out a quantitative projection since Dec. 2,” the day on which his projections were based.

'A lot of jobs'
The White House remarks were presaged Tuesday by comments from Snow, who backed away from the 2.6 million forecast during a visit to the Pacific Northwest with Evans and Labor Secretary Elaine Chao. The timing of his comments were puzzling, given that the trip, a sort of bus tour to visit workers and businesspeople, was intended to tout the administration's plans for job growth.

"I think we are going to create a lot of jobs," Snow said. "How many I don't know, but we're going to keep working on it."

Unemployment in Washington state, where Snow was visiting, is at 6.8 percent, up from 5.6 percent when Bush took office.

The administration's refusal to back its own jobs estimate brought criticism from John Kerry, the front-runner for the Democratic presidential nomination.

"Now George Bush is saying he's going to create 2.6 million jobs this year alone — and his advisers are saying, 'What, you didn't actually believe that, did you?'  Apparently George Bush is the only person left in the country who actually believes the far-fetched promises he's peddling," Kerry said in a statement.

Democrats on Capitol Hill also took the chance to jump on the president for his apparent retreat. Six Democratic senators sent Bush a letter lambasting the administration and saying that "serious questions are raised that the administration’s economic policies are in disarray." It was signed by Sens. Tom Daschle of South Dakota, Edward M. Kennedy of Massachusetts, Hillary Clinton and Charles Schumer of New York, Jon Corzine of New Jersey and Debbie Stabenow of Michigan.

Other critics of the president also see the jobs issue as a weak spot for a White House facing a tough election fight.

“The reason that the White House has been slow to admit that this isn't a typical recovery is because they don't want to admit that their tax-cut policies are not producing the jobs that they promised,” said Isaac Shapiro, a senior fellow at the Center on Budget and Policy Priorities.

"It's one thing to distance yourself from the numbers," added Jared Bernstein, Shapiro's counterpart at the Economic Policy Institute, which has ties to labor unions, "but this is the guy who sold his jobs and growth package based on job predictions."


Optimistic estimates
The actual forecast, released as part of the White House's annual report on the state of the economy, projected 132.7 million nonfarm jobs by the end of 2004, up from an estimate of 130.1 million jobs at the end of 2003.

The U.S. work force held 130,043,000 nonfarm jobs in December, according to preliminary data in the Labor Department's employer survey, and 130,155,000 jobs in January.

By those estimates, 112,000 new jobs were added last month, though other surveys have shown more modest growth. Even if payrolls continue to expand at that rate, only about 1.3 million new jobs would be created by year's end, half of the administration's projection. Assuming the higher number was accurate for January employment, over 231,000 jobs would have to be added each month through December to meet the council's prediction. By other analyses, the growth would have to be even stronger; Bernstein and Shapiro's organizations forecast required growth of 460,000 a month to meet the White House targets.

Based on the January 2004 figures, more than 2.1 million jobs would need to be added to match employment levels in February 2001, Bush's first full month in office.

Both Democrats and Republicans agree some job recovery will occur this year, but many economists feel the White House's recent estimate is overly optimistic.

Actually, the administration's employment forecast has become its second economic flap in recent days. Last week, Bush was forced to distance himself from another Mankiw assertion: that the loss of U.S. jobs overseas has long-term benefits for the U.S. economy.

McClellan defended the president's new assessment of the job outlook, saying said the annual economic report was based on data from about three months ago. The estimates for growth, he said, were not necessarily a fair reflection of current conditions.

"The number crunchers will do their job. The president's job is to make sure we're creating as robust an environment as possible for job-creation," McClellan said. "That's where his focus is."

NBC's David Gregory, MSNBC's Jon Bonné, The Associated Press and Reuters contributed to this report.

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