Economic Indicators

Last week, a White House spokeperson made the claim that "the economic surge that began five and a half years ago on President Bush's watch is more robust than the much-touted expansion during the Clinton administration."

"This is a much stronger expansion in a lot of ways," White House spokesman Tony Fratto told The Examiner. "It's much deeper and more measured."

The Examiner provides "dueling data points" that examine the question:

From the Bush camp:

• Real wages rose 1.8 percent over the 12 months through February. This is substantially faster than the average rate of wage growth in the late 1990s.
• Since the first quarter of 2001, productivity growth has averaged 2.8 percent. This is well above average productivity growth during the Clinton years.

From the Clinton camp:

• Under Clinton, the economy created 3.5 times more jobs after 74 months than it did over the same period of time under Bush.
• During the Bush years, the number of Americans below the poverty line has increased by 5.37 million, while under Clinton the number fell by 7.68 million.

An editorial in the Investor's Business Daily looks at the same claim, and asks: But how do you measure "stronger"?

The economic indicators that they use are the unemployment rate, new job creation, real after-tax income, and real wages. And from that they conclude the Bush economy is "stronger" than the Clinton economy.

The Economic Policy Institute uses different indicators to argue the picture is different:

This much is clear: the current recovery substantially lags the historical average in GDP growth, employment growth, investment in equipment and software, and, with the deflating housing market, even in residential investment. Conversely, corporate profit growth in the current recovery (despite a 3% dip in the last quarter of 2006) has been almost twice as rapid as in the past.

Dr. Larry Mishel of the Economic Policy Institute showed some of the limitations of economic indicators at a joint conference of the National Association of Planning Councils and the Community Indicators Consortium in 2005. His powerpoint presentation is here.

How do you measure economic vitality? How do you measure local or community economic vitality? In Jacksonville, Florida, an economist at the local university provides a set of local economic indicators that measure indicators of local industry stock performance, unemployment rates, consumer price index, and a leading economic index. Dr. Paul Mason provides a page of links to international, national, state, and local economic data. A separate community effort provides a broader set of community economic indicators that include measures of poverty and government assistance as well as average wages and unemployment but lacks the timeliness of Dr. Mason's work.

What are the best indicators to measure the strength of the economy at the community level?