With the economy the most important issue in the presidential campaign, it was no surprise that President Obama's Republican opponents tried to take some of the shine off Friday's surprisingly bright jobs report.
The Labor Department report said that the economy added 243,000 jobs in January, the most in nine months, and that the unemployment rate dropped to a three-year low of 8.3%. But former Massachusetts Gov. Mitt Romney, fresh from his big win Saturday in the Nevada caucuses, told a throng of supporters that the jobless rate has now been above Obama's own "red line of 8%" for 36 months.
On Sunday, Romney's economic advisor, Glenn Hubbard, and former House Speaker Newt Gingrich, in separate TV appearances, both spoke about the departure of many people from the labor force. If so many people hadn't quit looking for work, Gingrich said on ABC's "This Week" that the unemployment rate would now be 12% or 13%.
It's true that the deep recession and slow recovery have pushed many Americans to give up job searches, and thus aren't counted as officially unemployed. Some of them have gone back to school, and others have simply decided to stay at home or retire earlier than planned. In fact, the total civilian labor force – those who are working or looking for work – last month was essentially unchanged from January 2008, a month after the recession officially began. If the labor force had grown at the same rate as the prior four years, it would be about seven million people bigger today.
Even so, the Labor Department report Friday indicates that the dip in the jobless rate last month, from 8.5% in December, wasn't because of a drop in the labor force. It was because more people were employed. And while Gingrich has a point that the latest jobless rate understates the pain among workers, the unemployment figure still wouldn't be as high as he says it would be if workers hadn't dropped out. Rather, Mark Zandi, chief economist at Moody's Analytics, estimates the unemployment rate today would be 11.3% if the labor force had grown at a "normal" rate since the end of 2007.
"The aging of the population and slower foreign immigration due to stricter immigration enforcement would have resulted in slower labor force growth regardless of the recession," he said Sunday.
As for Obama's red line of 8%, just how the labor force responds in the coming months will have a lot to do with whether Romney will be able to keep using that sound bite in his campaign. If the economy continues to create as many jobs as it did in January – and droves of workers who had been sitting on the sidelines don't jump back into the labor market – the jobless rate could dip below 8% by November. But as most economists see it today, that is a very big if.