A Jobless Recovery

It is certainly possible to recover from a recession--and still have unemployment on the rise. Indeed, the unemployment rate is a classic lagging indicator in economic growth and recover.

In this most recent recession, we may have the mother of all jobless recoveries. Just look at where things stand at the moment.


Do you remember one of the Administration's goals--from my last blog?

According to the Romer report, Certain industries, such as construction and manufacturing, were likely to experience particularly strong job growth.

We just learned from the Bureau of Labor Statistics (BLS):

• Since December 2007, employment in construction has fallen by 1.5 million.

• Employment in manufacturing has contracted by 2.1 million since the onset of the recession.
  

In a recent Advance Realty and Rutgers report, America’s New Post-Recession Employment Arithmetic, there are several ugly conclusions:

• The Great 2007–2009 recession is the worst employment setback in the United States since the Great Depression.

• In the twenty months from December 2007 (the start of the recession) to August 2009 (the last month of available data as of this analysis), the nation lost more than 7.0 million private-sector jobs.

• The recession followed a very much-below-normal economic expansion (November 2001–December 2007) that was characterized by relatively weak private-sector employment growth of approximately 1 million jobs per year. Recall from my previous post that the $787 billion stimulus package was supposed to create almost all new jobs in the private sector.

• As of August 2009, the nation had 1.3 million (1,256,000) fewer private-sector jobs than in December 1999. This is the first time since the Great Depression of the 1930s that America will have an absolute loss of jobs over the course of a decade.

• Total “employment deficit” could approach 9.4 million private-sector jobs by December 2009.

Here is the real hurt: The “Harsh Arithmetic of the Employment Deficit” means that we will not likely return to 2007 employment levels until 2017.