GREAT BARRINGTON

PRESIDENT OBAMA has claimed that the $789 billion “stimulus” legislation he signed into law on Feb. 17 was urgently needed to save U.S. jobs, which the economy has been shedding in “record” numbers.

The president and media should re-examine the record books. In absolute terms, the 2.6 million jobs the economy lost in 2008 is indeed the biggest annual job loss since 1945.

However, it’s a great exaggeration to say this represents the worst annual job loss since World War II. The labor force was significantly smaller in 1945 than it is now. In 1945, total nonfarm employment was 39 million. Today, it’s 135 million, more than three times larger.

So last year’s loss of 2.6 million jobs represents a much smaller percentage of the work force than it would have then.

Relative to the size of the workforce, 2008’s job losses amounted to a decrease of 1.9 percent. In contrast, 1945’s job losses represented a much larger, and truly exceptional, decrease of 6.6 percent. To match that today, we would have had to lose 8.9 million jobs last year.

By this measure, last year’s job losses also were less severe than those reported during the recessions of 1949, 1954, 1958, 1961, 1975 and 1982. In other words, they were hardly unprecedented in postwar experience.

This is not to deny the rapid deterioration in the job market since September. It is likely that the job numbers will grow worse in coming months. But the notion that we have already experienced the worst job market in six decades is plainly overwrought. The risk is that such exaggerations will further erode the confidence of consumers, businesses and investors, and be used to justify extraordinary policy responses to not-so-extraordinary cyclical phenomena.

Kerry Lynch is a senior research fellow at the American Institute for Economic Research, in Great Barrington, Mass. ( www.aier.org).