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Thursday, October 28, 2010

"The Pace of Job Creation Has Been Frustratingly Meager"

Macroadvisers says employment is not likely to recover until 2013:

Macro Musing: Are We in Another Jobless Recovery?:

  • The U.S. is in the midst of another “jobless recovery,” in the sense that employment gains have been meager relative to enormous job losses that occurred during 2008 and 2009.
  • We anticipate that job gains will continue at a moderate rate, and that the pre-recession peak in private nonfarm payroll employment won’t be reached until 2013, nearly 4 years after the recession ended.
  • This would be roughly comparable to the time it took to regain the pre-recession peak in employment following the 2001 recession, but approximately twice as long as the recovery in employment following the 1990–91 recession and approximately four times as long following recessions in 1970, 1973–75, and 1981–82.
  • The overwhelming factor contributing to the much more sluggish pace of job creation in recent recoveries is much slower growth of output.
  • In contrast, other factors — including productivity growth and changes in the workweek — have played only minor roles in accounting for slower growth of private nonfarm payrolls in recent recoveries.
  • The severity of the decline in employment during 2008 and 2009 is largely accounted for by the weakness in output during the recession, and not by anomalous behavior of productivity.

Are we in a jobless recovery? Yes, if one doesn’t quibble too much with semantics. While it is not the case that there have been no jobs gained in the last few months, the pace of job creation has been frustratingly meager ... [more] ...


I made the same forecast about a year ago, but full recovery by 2013 is looking optimistic now. I wouldn't be surprised if it takes even longer than that.

    Posted by on Thursday, October 28, 2010 at 12:42 AM in Economics, Unemployment | Permalink  Comments (86)


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