Obamacare and the Recovery, in One Chart

Click to enlarge


The source for the underlying chart is the Department of Labor blog, with my annotations added.

Postscript:  In most cases legislation is anticipated to pass well in advance and one could argue the effects of it show up even before the signing date.  But in this case whether the PPACA would pass was a nail-biter to the last moment.


  1. mesaeconoguy:

    It was more than a nail-biter: They had to shove it thru in the dead of night to get it “passed.”

    But the robust debate leading up to it gave a pretty clear picture of employer/employment impact, and so far it is as anticipated.

    A huge job killer.

  2. Harry:

    QED, Coyote.

  3. Eric Johnson:

    How to lie with charts.

    You are basically making the same mistake that Alan Goolsbee made. Take a look at the following video which breaks down exactly how his chart is misleading.


    The whole critique is good, but the portion relevant to Coyote's mistake is found at about 9:30 into the clip.

  4. Ted Rado:

    It appears that we are headed fopr total chaos with the onset of Obamacare. It is so complex and laden with red tape that it will be impossible to manage. Oh, well. The USG screws up everything else, so why not this?

  5. marque2:

    The chart deviates from the pattern of a normal recovery. Usually you have 3 - 4 quarters of very heavy hiring, and then it goes down to some normal level.

    This time around that didn't happen. Whether there is a logical fallacy or not. The current recover deviated significantly from previous ones.

    The question is why? Could it be economic killing legislation per libertarians, or greedy banks still in control, with oil and pharmaceutics companies, as the lefties like to claim?

  6. Eric Johnson:

    My critique is has nothing to do with logical fallacies (i.e. post hoc ergo proptec hoc).

    The chart is presented as if the passage of PPACA was causal. If you are going to make that claim, you shouldn't be presenting data based on the second derivative of employment. You should focus on the nominal employment number or maybe the first derivative.

    Bear in mind that I actually AGREE that PPACA was a bad idea. However the chart really doesn't nothing to prove that point.

  7. marque2:

    Economics is a hard field, just about nothing can be done to prove a point, because there are so many variables. So yes the evidence is always a touch circumstantial What would be nice is some explanation relating why the legislation proved to have an instant effect on hiring. Personally though, I think that has been beat into the ground. Companies instantly stopped hiring because of uncertainty to to this and similar bank reform legislation, and decided to go through another round austerity, rather than plan for growth.

  8. mesaeconoguy:


    As Marque2 observes, we should have seen a continued strong hiring trend past the second positive month. We didn't.

    Also, change is first derivative of the underlying nominal employment number, not second.

  9. Eric Johnson:

    The upward sloping arrow represents the sign of the second derivative. That is the discontinuity that the graph highlights.

  10. mesaeconoguy:

    Ah, ok, but again, that trendline would look very different had a “normal” hiring rebound occurred…