JOB FIGURES UNDER OBAMA
The claim: "The president ... has made it harder for new businesses to start up. As a matter of fact, the number of new business start-ups per year has dropped by 100,000 per year. This is just unacceptable and it's one of the reasons why it has been so hard for this economy to recover." Mitt Romney, on "Fox & Friends," April 19.
The facts: The Romney campaign directed us to congressional testimony this year by Brookings Institution scholar Martin Neil Baily, who was chairman of the Council of Economic Advisers under President Bill Clinton. His testimony was accompanied by a chart by McKinsey Global Institute using Bureau of Labor Statistics data, that gave the year-to-year figures through 2011, starting in March. (The BLS uses March-to-March figures because the data is less affected by holidays and other factors.) The Romney campaign used the 2008 figure, 627,000 new businesses, and subtracted the 2011 figure, 536,000 new businesses, for a decline of 91,000.
But here's the rub. The McKinsey chart, and the BLS website, say the figure reflects the companies created the year before. In other words, the 2009 number would reflect jobs created from March 2008 to March 2009. Senior adviser Eric Fehrnstrom then acknowledged it was March to March data, but added: "The point is the same -- we are comparing activity under Obama to activity that largely took place before Obama took office."
However, the 2008 number counts jobs created from March 2007 to March 2008, which includes months before the recession even started in December 2007. David Talan, a BLS economist, said the correct starting point for measuring the change in new business creation under Obama would be the 2009 figure. Baily also said that the correct starting point would be 2009, not 2008, as did Susan Lund, director of research at the McKinsey Global Institute and co-author of the report that originally contained the chart.
Using 2009 as a starting point, the results are vastly different than Romney's claim of a 100,000 plunge. The figure for 2009 is 548,000 jobs, so that's a decline of 12,000 by 2011. But let's not forget the recession did not end until June 2009. From 2010 to 2011, the number increases by 29,000.
The bottom line: By using the 2008 numbers, Romney essentially is comparing pre-recession figures with post-recession figures, not data that reflects what happened under President Obama.