Nation & World News
White House jobs forecast
met with doubts by critics
Democrats and economists
criticize the White House's
prediction of 2.6 million
new jobs by 2004’s end
By Robert Manor
Chicago Tribune (KRT)
CHICAGO — Declaring that the
nation's jobless recovery will soon
end, the White House predicted
Monday that the economy would
create 2.6 million new jobs by the
end of the year, a forecast that De
mocrats and some economists criti
cized as overly optimistic.
The annual Economic Report of the
President predicted that the nation's
economy would see substantial im
provement by the end of this year,
with overall growth of about 4 per
cent — a number in line with many
independent forecasts.
But the most controversial aspect of
the report, prepared by President
Bush's Council of Economic Advisers,
was the new job estimate. Last year's
report predicted that 1.7 million jobs
would be created in 2003. Instead, the
nation lost 53,000 jobs. In Bush's
three years in office, 2.2 million jobs
have disappeared.
Since the Great Depression, it has
never taken this long for the economy
to begin creating jobs after emerging
from a recession. After the last recession
ended in 1991, it took 14 months for
employment to begin expanding.
Current problems with the econo
my have gone on nearly twice as long,
26 months. Job creation has been
even slower, and many out-of-work
Americans have exhausted their un
employment benefits.
"After months and months of dis
appointing job creation, it's clear that
the administration's policies are still
not working for ordinary Americans,"
said Senate Minority Leader Tom
Daschle, D-S.D.
Daschle noted that unemployment
figures released last week indicate 8.3
million people still are out of a job.
On the campaign trail, Sen. John
Kerry of Massachusetts, the front-run
ner for the Democratic presidential
nomination, said Bush had the worst
jobs record since Herbert Hoover. The
view of the economy presented in the
new report, he added, was probably
"prepared by the same people who
brought us the intelligence on Iraq."
"I don't think we need a new report
about jobs in America," Kerry told a
campaign rally in Roanoke, Va. "I
think we need a new president who is
going to create jobs in America and
put America back to work."
In the report, which the president is
required to deliver annually to Con
gress, Bush and his advisers defended
the administration's economic stew
ardship. They noted that the economy
has been able to overcome a series of
shocks, starting with the bursting of
the stock market bubble in early
"After months and
months of disappointing
job creation, it's clear that
the administration's
policies are still not
working for ordinary
Americans."
Tom Daschle
D-S.D., Senate Minority Leader
2000, followed by the 2001 terrorist
attacks, two wars and numerous cor
porate scandals.
"As 2004 begins, America's economy
is strong and getting stronger," Bush
said in the report's preface "The unem
ployment rate has fallen from its peak
of 6.3 percent last June to 5.7 percent in
December, and employment is begin
ning to rise as new jobs are created, es
pecially in small business."
Later, at an appearance in Spring
field, Mo., Bush defended his stew
ardship of the economy, saying his tax
cuts are helping fuel the current recov
ery and warning that Democrats who
want to roll back those cuts would re
ally be raising taxes on families and
small businesses.
"I hope people come away from
this discussion with this great sense of
optimism about the future of our
country," Bush told several hundred
workers and residents at a plant that
makes car and boat engines.
Officially, Bush is still not focus
ing on the presidential campaign,
according to his aides. But Monday's
event marked the third time he has
traveled to a state in which Democ
ratic presidential candidates just
competed in a primary.
Most economists said they expect
more jobs to be created in 2004 as the
recovery gains steam. But many also
cautioned that the White House's pre
diction is aggressive, noting that only
112.000 jobs were created in January.
Economists had expected 150,000
new jobs in Friday's Labor Depart
ment report for January. Most have
said the economy should be creating
200.000 to 300,000 a month to sus
tain the recovery.
• In a normal year, Bush's hope for
2.6 million new jobs would be realis
tic and probably could be achieved,
said Douglas Porter, senior economist
with BMO Nesbitt Burns, an invest
ment firm affiliated with the parent
company of Chicago's Harris Bank.
"Unfortunately, this recovery has
been marked most notably by persist
ent weakness in the labor market,"
Porter said. "I suspect that will contin
ue to be a hallmark of the recovery."
Porter said he expects about 2 mil
lion jobs to be created by year's end.
Paul Kasriel, chief economist at
Chicago's Northern Trust Co., was
more pessimistic.
"I doubt that we will see that many
new jobs created this year," he said of
the White House prediction. "I think
it will be 1.5 million, which is better
than a poke in the eye."
But he added, "Even that is iffy."
Lee Price, research director of the
liberal Economic Policy Institute, said
expansion of the labor market is sup
pressed, in part because many people
are putting in unpaid overtime. With
the economy still on shaky ground,
he said, employers have held off hir
ing and are asking their employees to
be more productive.
"Some of it is salaried people work
ing longer hours," Price said, "and
some of it is people working harder."
(c) 2004, Chicago Tribune. Distributed
by Knight Ridder/Tribune Information
Services. Tribune national
correspondent Bob Kemper contributed
from Springfield, Mo., and senior
correspondent William Neikirk
contributed from Washington, D.C.
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