There is rarely an election issue more important than jobs and the economy. For example in 1992, James Carville placed the slogan "It's the economy, stupid!" in strategic locations to keep the campaign on focus.

There are parallels between the 1992 and 2004 elections. First, both sitting Presidents engaged U.S. military forces in Iraq prior to running for re-election. Second, both suffered from lackluster economic performance. However, Bush 41 embarked on the route of tax increases whereas Bush 43 turned to tax cuts and deficit spending. What impact has this deficit spending had on the economy?

The Economy in 2004 : Jobs
In July, President Bush said:

We're witnessing steady growth, steady growth. And that's important. We don't need boom-or-bust-type growth.

Bush was responding to disappointing data about job growth, which dropped sharply in June to less than half the expected number. And numbers for April were revised downwards as well.

But what does that mean in the context of a four-year term of office? In February 2001 there were 111.6 million private sector jobs. In June, the Bureau of Labor Statistics reported only 109.8 million. That's a shortfall of 1.83 million private sector jobs.

According to Economy.com Chief Economist Mark M. Zandi, "There's no chance we'll regain those by Election Day. That will make him the first President since Hoover not to have added jobs on his watch."

Giving credence to Zandi's prediction about a net loss of jobs during the term of office, Sung Won Sohn, chief economist for Wells Fargo & Co., told AP in June that the economy would add an average of 200,000 jobs per month for the rest of the year. He was overly optimistic for June, but even his numbers are insufficient to meet the shortfall.

The economy would need to produce a net of more than 400,000 new private sector jobs each month for the next four months for the President to break-even. And what was the disappointing June number? At 112,000, it was less than half the average monthly increase of the first five months of the year and below the 150,000 threshold needed to keep pace with the natural growth in the labor force.

Another challenge for those seeking work is that most jobs being added to the economy are low wage (60 percent) with few benefits. Also, the average number of hours worked dropped slightly to 33.6 hours, down from 33.8 hours in May. And real average hourly earnings (adjusted for inflation) are falling, not rising.

The Economy in 2004 : Unemployment
Unemployment data have improved since hitting a high of 6.3 percent last June. June's number was 5.6 percent, virtually unchanged this year. However, economists say that if we added underemployed workers or those who have stopped looking for work out of disillusionment to the picture, then the unemployment rate would be closer to 10 percent.

The work force participation rate for June was 62.3 percent, almost unchanged from last August at 62.2 percent but still down from 64.4 percent four years ago. It is considerably below the 66.7 percent from June 1992.

The Economy in 2004 : Purchasing
The Eugene Register Guard noted that

Other recent indications of weakness in retail sales, auto buying and durable goods, also hint at a pullback in the economy's strong performance of recent months.

Sources:

• 1.5 Million Jobs Created Since August, GOPUSA.com, 6 July 2004
• Bush: Economy getting better, Scripps Howard News Service, 2 July 2004
• If You're Unemployed, You're Stuck, Business Week Online, 6 July 2004
• Job figures cast shadow over extent of recovery, Eugene Register Guard, 3 July 2004