The big news Friday was that the unemployment rate had ticked back down 0.1 percent to 9.4 percent even though more people were unemployed in July than in June. The cause of that discrepancy is that even more people were removed from the available workforce because they’ve become “discouraged workers” – people no longer looking for work.
This news prompted just about every media outlet in the nation to opine that the economy just might be on the upswing. For those of us who remember all the complaints about how the economy was in the doldrums in the middle of the Bush administration because only 50,000 jobs were added the previous month, this newfound optimism is puzzling.
As Byron York notes in yesterday’s Washington Examiner, The New York Times wasn’t so optimistic back in 1992 when eerily similar economic news could’ve been a boon to a GOP president locked in a tough re-election fight.
The Times hasn't always been so optimistic when it comes to one-tenth-of-a-point declines in the unemployment rate. On this very day in 1992, in the midst of the presidential campaign between George H.W. Bush and Bill Clinton, the government also reported that the unemployment rate ticked downward by one tenth of a point, and the Times' treatment was far more restrained.
"Jobless Rate Dips a Notch to 7.7% in Mixed Showing," was the front-page headline of the August 8, 1992 Times. "The nation's jobless rate improved marginally last month, edging down to 7.7 percent from 7.8 percent," the Times reported. "But the improvement was not enough to signal a stronger economic recovery or to help President Bush as he heads into the Republican National Convention." Even though the number of jobs actually went up in July 1992 (as opposed to the decline of 247,000 jobs in July 2009), the 1992 Times reported that the economic news "gave no suggestion that the economic recovery was breaking out of its painfully slow pace or, more important, that the job growth was picking up enough to push the unemployment rate down significantly before the election in November." Pollster Peter Hart told the paper that, "There couldn't be worse political news for George Bush."
Under the sub-headline "Stagnant Period Seen," the Times reported that "most forecasters" predicted "more of the same: an economy that is just muddling along." The Times looked deep into the data to find "disappointing" numbers everywhere; many of the new jobs were in the service sector, there weren't enough construction jobs, some of the improvement was the result of a government program. (The Times appeared less enthusiastic about government stimulus back then.)
As it turned out, the one-tenth-of-a-point drop in the unemployment rate in July 1992 signaled the end of the increase in the jobless rate. Looking at this table from the Bureau of Labor Statistics, you can see that at the very moment the Times was declaring a period of stagnation, the unemployment rate was in fact beginning a long decline that would extend through the Clinton years.
Of course, the Times' editors and writers didn’t know that then, and they stressed the negative aspects of the economic news. But they don't know what's going to happen now, either, and they're filled with hope. Quite a difference.
And unfortunately, it’s really not news. Bob Kohn’s book “Journalistic Fraud” back in 2003 made the same case in much longer form.