Top Republicans are claiming credit for a variety of metrics showing that the economy is improving. Expect this meme to snowball, particularly as Democrats have done little, so far, to stop it. On Fox News today, House Rules Committee Chair David Dreier (R-CA) contended the GOP deserves all the credit for recent economic growth. "[W]e can get our economy growing. And we've gotten some positive numbers. I think it's in large part because we won our majority and we're pursuing pro-growth policies," he said. In December, the Department of Labor announced that unemployment had fallen from 9.7 percent to 9.4 percent. Its data suggests private sector job growth has been increasing since the fall. The GOP has controlled the House for just over two weeks, but has yet to enact any major economic legislation -- and economists agree that even enacted fiscal policy will not be immediately reflected in economic growth.
As far as real GDP, we have not seen the report for the last quarter of 2010 but since the last quarter of 2009 when annualized growth was 5.0%, real GDP growth for the next 3 quarters was anemic especially in terms of the size of the GDP gap. Over the last 3 months of 2010 – employment per the payroll survey has risen by only 384,000 or just 128,000 new jobs per month. During the same period, the employment-population ratio has declined from 58.5% to 58.3%.
Simply put – the labor market has been very weak and not getting better. Brian is correct that we have yet to see any major economic legislation from the new Congress. But if David Dreier wants us to give his political party the credit for this mess – so be it!