The politics of the economy
The politics of jobs numbers will be on full display the rest of the week.
The White House is crowing about the Commerce Department report this morning that the US economy grew by 3.5 percent in the third quarter, the highest growth rate in two years and the strongest sign yet that the worst recession since the 1930s is done.
The growth was fueled by consumers spending money on cars and homes provided in large measure by Obama administration programs. But many economists believe that the growth rate will slow as the impact wanes from the $787 billion economic stimulus package.
“Data released today by the Commerce Department show that real GDP grew at an annual rate of 3.5 percent in the third quarter of the year. This is in stark contrast to the decline of 6.4 percent annual rate just two quarters ago. Indeed, the two-quarter swing in the rate of growth of 9.9 percentage points was the largest since 1980. Analysis by both the Council of Economic Advisers and a wide range of private and public-sector forecasters indicates that the American Recovery and Reinvestment Act of 2009 contributed between 3 and 4 percentage points to real GDP growth in the third quarter. This suggests that in the absence of the Recovery Act, real GDP would have risen little, if at all, this past quarter,” the White House said in a statement.
“After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the U.S. economy is moving in the right direction. However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered. The turnaround in crucial labor market indicators, such as employment and the unemployment rate, typically occurs after the turnaround in GDP. And it will take sustained, robust GDP growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve.”
Republicans, meanwhile, are highlighting an Associated Press report that the initial job numbers from the stimulus package have been overstated by thousands. The AP said some jobs credited to the stimulus program were counted two, three, four or even more times.
While the administration claimed that federal contracts awarded to businesses under the recovery plan already had helped pay for more than 30,000 jobs, the AP said its limited review found the number was overstated at the very least by nearly 5,000, or one in six.
The story gave more ammunition to Republicans who argue that the stimulus has been a flop.
But the White House quickly issued a lengthy response.
"“This story draws misleading conclusions from a handful of examples. It looks at only a small portion of the data – an initial upload of data representing just two percent of Recovery Act spending – that was made publicly available before a full review of its accuracy could be done. Virtually all of the errors found by the AP had already been found by our review, and were already corrected in an update to be loaded onto Recovery.gov this week," said Ed DeSeve, a senior adviser to the president in charge of the stimulus package.
"Tomorrow, more than 100,000 recipient reports will be posted on Recovery.gov. Unlike the small number of reports reviewed by AP, these reports have been reviewed for weeks, errors have been spotted and corrected, and additional layers of review by state and local governments have further improved the data quality. As a result, whatever problems the early and partial data had, the full data to be posted on Friday will provide the American people with an accurate, detailed look at the early success of the Recovery Act,” he added in a statement.
The full White House statement is below:
WHITE HOUSE RESPONSE
Key Points:
AP looked only at the earliest data posted, representing just 2% of Recovery Act spending.
The data errors cited by AP – on about 5,000 jobs -- are not significant to the total job count (of hundreds of thousands of jobs) that will be posted on Friday.
It is not surprising that there were errors in these very first postings ever on Recovery.gov – made just three business days after data was submitted. The data upload coming on Friday has benefited from three weeks of review, and will not have similar problems.
Of the five specific problems cited by AP, four had already been found and fixed.
Statement from Ed DeSeve, Senior Advisor to the President for Recovery Act Implementation:
“This story draws misleading conclusions from a handful of examples. It looks at only a small portion of the data – an initial upload of data representing just two percent of Recovery Act spending – that was made publicly available before a full review of its accuracy could be done. Virtually all of the errors found by the AP had already been found by our review, and were already corrected in an update to be loaded onto Recovery.gov this week.
Tomorrow, more than 100,000 recipient reports will be posted on Recovery.gov. Unlike the small number of reports reviewed by AP, these reports have been reviewed for weeks, errors have been spotted and corrected, and additional layers of review by state and local governments have further improved the data quality. As a result, whatever problems the early and partial data had, the full data to be posted on Friday will provide the American people with an accurate, detailed look at the early success of the Recovery Act.”
Here are the real facts on the misleading AP story on the Recovery Act recipient reporting process:
“The errors could be magnified Friday when a much larger round of reports is released.”
· FACT: The federal contract data AP reviewed was a test run posting of a small sub-set of the data that was made available to the public after less than three business days of review time. The full data that will be posted on Friday will have undergone an extensive review process for twenty days involving the Recovery Board, federal agencies and direct communication with the recipients themselves. So the data posted this Friday will be more accurate – not less – than what was posted on October 15th.
· FACT: The federal contract data AP surveyed represents just 2 percent of overall Recovery Act spending and just a fraction of what will be posted on Recovery.gov on Friday. It does not provide a statistically significant indication of the quality of the full reporting that will come on Friday.
“A Colorado company said it created 4,231 jobs with the help of President Barack Obama's economic recovery plan. The real number: fewer than 1,000.”
· FACT: The very first example AP cites was already corrected more than a week ago as part of the twenty-day review process and the change is in the final data posting being prepared for Friday. This item represents over 3,000 – or 60 percent – of the “nearly 5,000 jobs” AP uses to try to make its argument.
· FACT: All recipients were given through October 30th to clarify and confirm their data – including those linked to federal contracts. Any conclusions drawn about the quality of that small portion of data as it was posted two weeks ago are simply premature.
Officials at East Central Technical College in Douglas, Ga., said they now know they shouldn't have claimed 280 stimulus jobs linked to more than $200,000 to buy three semi-trucks and trailers for commercial driving instruction, and a modular classroom and bathroom for a health education program.
· FACT: This item – which represents less than .06 percent of the total jobs reported was also already corrected more than a week ago as part of the twenty-day review process and the change is in the final data posting being prepared for Friday.
· FACT: All recipients were given through October 30th to clarify and confirm their data – including those linked to federal contracts. Any conclusions drawn about the quality of that small portion of data as it was posted two weeks ago are simply premature.
The San Joaquin, Calif., Regional Rail Commission reported creating or saving 125 jobs as part of a stimulus project to lay railroad track. Because the project drew from two pools of money, the commission reported that figure twice, bringing the total to 250.
· FACT: This item – which represents less than .04 percent of the total jobs reported - was also already corrected as part of the twenty-day review process and the change is in the final data posting being prepared for Friday.
· FACT: All recipients were given through October 30th to clarify and confirm their data – including those linked to federal contracts. Any conclusions drawn about the quality of that small portion of data as it was posted two weeks ago are simply premature.
The Toledo, Ohio-based Koring Group also received two FCC contracts to help people make the switch to digital television. The company reported hiring 26 people for each of the two contracts, bringing its total jobs to 54 on the government's official count. But the company cited the same 26 workers for both contracts, meaning the same jobs were counted twice. The job count was further inflated because each job lasted only about two months, so each worker should have counted as one-sixth of a full-time job.
· FACT: This item – which represents less than .01 percent of the total jobs reported - was also already corrected as part of the twenty-day review process and the change is in the final data posting being prepared for Friday.
· FACT: All recipients were given through October 30th to clarify and confirm their data – including those linked to federal contracts. Any conclusions drawn about the quality of that small portion of data as it was posted two weeks ago are simply premature.
While the thousands of overstated jobs represent a tiny sliver of the overall economy, they represent a significant percentage of the initial employment count credited to the stimulus program.
· FACT: The overestimate of “thousands” of jobs AP cites is out of hundreds of thousands of jobs that will be reported overall on Friday – the vast majority of which underwent the more extensive twenty-day vetting process.
· FACT: Even if you remove the “nearly 5,000 jobs” from the total federal contracts job number, it is still in-line with government and private forecaster’s estimates of about one million Recovery Act jobs overall to-date.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at johnson@globe.com. Follow him on Twitter @globeglen. |
