CAMBRIDGE – What a difference two months make. When the Republican Party scored strong gains in last November’s US congressional elections, the universally accepted explanation was that voters were expressing their frustration with disappointing economic performance. Indeed, when Americans went to the polls, a substantial share thought that economic conditions were deteriorating; many held President Barack Obama responsible and voted against his Democratic Party.
Now, suddenly, everyone has discovered that the US economy is doing well – so well that Senate Majority Leader Mitch McConnell has switched from blaming Obama for a bad economy to demanding credit for a good one. Recent favorable economic data were, he claimed, the result of “the expectation of a Republican Congress.”
But the improvement in US economic performance began well before the November election. Indeed, it began well before September, when polls started to indicate that the Republicans were likely to do exceptionally well, taking control of the Senate and enlarging their majority in the House of Representatives.
The fact is, job growth was vigorous throughout 2014, averaging 246,000 per month – three million for the year – bringing the unemployment rate down to 5.6% in December 2014 (from 6.7% a year earlier). This represented an acceleration relative to the monthly average of 185,000 in 2011-2013, and it looks even better compared to the previous economic expansion of 2002-2007, when monthly job creation stood at 102,000. Indeed, the recent numbers recall the halcyon days of Bill Clinton’s presidency.