A Project of The Annenberg Public Policy Center

Romney’s Economic Exaggerations


Mitt Romney mistakenly claimed the U.S. is experiencing "the worst recovery … in America's history," citing the Wall Street Journal. But the newspaper article said it was "the worst, or one of the worst, since the government started tracking these trends after World War II." That obviously does not include the recoveries following the Great Depression or 20 other economic downturns that have occurred since 1857.

Romney, the former Massachusetts governor who is running for president, made a couple of other economic exaggerations during a campaign appearance at a defunct strip mall in North Hollywood, Calif., on July 20:

  • He correctly said Massachusetts' unemployment rate was below the national average "three of the four years I was in office." However, that's misleading. The state's monthly unemployment rate was lower than the national average when he became governor, but it was the same as the national average when he left office.
  • He claimed that "over 500,000 people have lost their jobs in California since President Obama has been president." It has been fewer than — not more than — 500,000. California has lost about 460,000 since January 2009.

'Worst Recovery' in U.S. History?

In the parking lot of the shuttered Valley Plaza Mall in North Hollywood, Romney blamed the mall's problems on the sputtering economic recovery.

Romney, July 20: We're now in a recovery period, the economists tell us, even though it still feels like a recession to a lot of people, and that economy, the Wall Street Journal concluded, is the worst recovery we've had following a recession in American's history.

Romney was referring to a July 5 Wall Street Journal article that presented the current recovery in grim terms — but did not go as far as Romney claimed.

Wall Street Journal, July 5: Across a wide range of measures—employment growth, unemployment levels, bank lending, economic output, income growth, home prices and household expectations for financial well-being—the economy's improvement since the recession's end in June 2009 has been the worst, or one of the worst, since the government started tracking these trends after World War II.

Mitt Romney is wrong on two counts. First of all, the article does not compare this recovery with all past recoveries in America's history. That's because of one simple reason: The data only exist for post-World War II America. From 1857 until 1938, the National Bureau of Economic Research counted 21 recessions — including the Great Depression, which started in 1929, and the Panic of 1873, which became known as the Long Depression because it lasted a record 65 months. But those weren't part of the newspaper's analysis of post-World War II economic recoveries.

Romney also misled his audience by reducing the article's complex analysis to a sound bite. The article's ranking of this recovery as the "worst or one of the worst" in the post-World War II era is based on an analysis of many different economic factors and is not a matter of fact. The data provided in the article, for example, do show that home prices, disposable personal income, bank lending are rising at the lowest rate of any recovery since 1945. But in other measures, including GDP, personal spending and total employment, this recovery ranks low but not the lowest during that time frame. Finally, the economy is doing relatively well with rising exports and corporate profits.

Today's recovery is sluggish at best — Romney would have been justified in saying that this recovery is one of the worst in recent history. But he can't say it is the worst in America's history.

State and National Unemployment Rates

Romney also gave a misleading account of his employment record as Massachusetts governor, suggesting that it was better than the national average. It wasn't.

Romney, July 20: I'm proud of the things we were able to do to help create jobs, to lower the unemployment rate. Three of the four years I was in office, our state's unemployment rate was below the national average.

It's true that Massachusetts' unemployment rate was below the national average in Romney's first three years as governor in 2003, 2004 and 2005, according to the Bureau of Labor Statistics figures for yearly averages. But in 2006, the last year he held office, the Massachusetts unemployment rate was 5 percent — higher than the national rate of 4.6 percent. So the unemployment rate improved more slowly in Massachusetts (dropping from an annual average of 5.8 percent to 5 percent) than it did nationally (from 6 percent to 4.6 percent.) The monthly unemployment rate tells a similar story. The unemployment rate in Massachusetts stood at 5.6 percent when he took office in January 2003, slightly lower than the nation's 5.8 percent rate. But the rate was 4.6 percent when he left in January 2007 — the same as the national average. 

Romney also told his audience that "over 500,000 people have lost their jobs in California since President Obama has been president." That isn't quite true.

According to the Bureau of Labor Statistics, California has lost 460,000 jobs since January 2009, the month of Obama's inauguration.

In fairness, the job loss in California was much greater at one time. It hit 681,000 in September of last year, compared to when Obama took office. But the state has regained many of those jobs, and the net loss under Obama is now below 500,000.

— Lalita Clozel, with Eugene Kiely