ECONOMIC GROWTH AND JOB CREATION / THE WALL STREET JOURNAL REVIEW & OUTLOOK

Review & Outlook

Economic Growth and Job Creation

There won't be a strong jobs report until strong growth returns.

March 7, 2014 6:28 p.m. ET


We wish we could share the view of some that Friday's report of 175,000 new nonfarm jobs in February was a sign of "positive momentum" in the economy. A more realistic view is that the jobs market avoided the worst of the winter weather but returned to the slow growth status quo of the last year. The report fits the 2.4% GDP growth rate in the fourth quarter, a significant slowing from the third quarter's 4.1%, and the consensus is that it may be slower this quarter.

The U.S. is not going to see more rapid job creation without growth at or above 3%. The recession ended in June 2009, and the growth surge that should have followed never materialized. For five years the Obama growth rate has averaged about 2.4%, well below the norm. 

That underperformance is feeding directly into the labor-force participation rate stuck at 63%, still near a 36-year low. Friday's report notes an additional 203,000 people have been out of work for 27 weeks or longer, with the total at 3.8 million.

The Obama budget out this week reflected the same economic strategy since 2008: Redistribute money into the economy via higher federal outlays and watch demand produce growth. The amazing news is that the economic is doing as well as it is with such antigrowth policies.