Could We PLEASE Have Some Good News?
So the Employment Report for August is out, and everyone is focusing on the zero net increase in establishment employment between July and August. That's depressing enough, but month-to-month changes are (a) volatile and (b) subject to fairly large revisions. I have a tendence to look at year-over-year changes. So, in the diagram here (click the diagram for a larger view), I've shown the 12-month growth rates in employment, for both measures of employment, and the 1990 - 2007 average annual growth.
What's depressing here is that, since the "recovery" began, there has not been a single 12-month period during which employment has grown at or above the average for the 1990 to 2007 period. In this "recovery," employment growth has never even approached rapid. This is extradordinary. The US economy has never had a recovery from a recession in which this has been true. At least since 1948 (when we began the household survey) and not since the establishment survey began in 1939, for establishment employment numbers. In short, as recoveries go, this is unprecedentedly awful.
Meanwhile, the employment-population ratio has not budged. It's still just barely above 58%, down from its recent peak (in 2000) of around 64.5%. The employment-population ratio has not been this low since August 1983, just before employment began to grow quite rapidly as we recovered from that recession (by August 1984, the employment-population ratio was back up to 59.6%). In this "recovery," the employment-population ratio has not shown any upward trend at all (click the diagram for a larger view).
And our current policy response, both from the Federal Reserve and from the Obama Administration, appears to be hope that things will improve.
Hope is not a plan.