White House Revises Jobs Forecast Downward
For the current year, job growth will come in at an anemic 1.5 million or so, far below the number of new jobs needed to accommodate growth of the labor force. Even at 2.1 million new jobs, there will be little positive distance between the new jobs available and the new labor force entrants needing work. More importantly, the Council did not venture to describe the quality of new jobs that will be posted by employers. This has impact in at least several dimensions:
a "job" is a job in these forecasts, whether the compensation is for $60,000 with full benefits or for minimum wage with no benefits;
regional variations in hiring may make jobs available in parts of the country other than where jobs are needed most.
Also, in predicting that job formation will be better in 2005 than it was in 2004, the White House is assuming that the economy will grow more robustly than it did this year, an assumption challenged by the inevitability of rising interest rates that will slow down business activity and consumer spending, both of which are key to macroeconomic performance. During the just-concluded Presidential campaign, Mr. Bush was taken to task for predictions during his first term about job growth that proved far too optimistic.