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The so-called jobless recovery, first mentioned in a 1935 New York Times article, seems to have become a reality, especially with the last three recessions being time stamped as the next 18-month recovery period. Job recovery during this time has been a struggle:
|Recessions||Jobs Lost||Recovery (18 months)|
|July 1990 - March 1991||1,286,000||389,000|
|March 2001 - November 2001||1,606,000||-2,885,000|
|December 2007 - June 2009||7,309,000||-199,000|
Historically, jobs are the last to "snap back" and I think the NBER has time stamped recessionzs too quickly for the past two decades. With that in mind, using the next 36 months to gauge the recovery, within the post -1991 period, have seen a net 3,385,000 jobs lost since the start of the recession.
o The 2001 recession saw 2,257,000 net jobs lost
o The Great Recession, with US economy still down, saw 3,948,000 jobs lost
|Recessions||Jobs Lost||Recovery (36 months)|
|July 1990 - March 1991||1,286,000||4,671,000|
|March 2001 - November 2001||1,606,000||-651,000|
|December 2007 - June 2009||7,309,000||3,007,000|
In fact, we only just got back to where we began the Great Recession, seven years ago.
I'm reminded of the idea that we are now in a period where all recoveries will be of the "jobless" variety with Empire State data pointing to strong manufacturing data, as general business and new orders surged to the four year highs, but the number of people employed plunged to 50% (from 20.88 in May, to 10.75 in June).
So is America doomed to jobless recoveries or has faulty policy been the reason we haven't had robust jobs recoveries?
On the other hand, we note that the broader US manufacturing sector is making a comeback. Industrial production as reported by the Federal Reserve's month index posted a strong 0.6% increase in May after a 0.3% decline in April and managed to top analyst expectations of a 0.5% increase. The manufacturing component of the index also jumped 0.6% in May after falling 0.1% in April and was in-line with consensus expectations. Most noteworthy in the report was that mining increased 1.3% in May after a 1.6% boost the month before, while utilities declined 0.8%, but was better than the 4.5% decline in April. The manufacturing component (excluding motor vehicles) increased by 0.5% in May after declining by 0.3% in April. All in all, this continues to support our thesis for the recovery of the industrial sector in the second half of 2014.