The big picture on employment and recovery

3 Feb 2012 by Jim Fickett.

Backing off to look at the big picture, it is clear that

  • the medium-term trend is probably for job growth slightly faster than that of population
  • we are not going to really catch up on lost jobs (i.e. come back up the the dashed line in the figure below)

What is going on? I have pointed out before (On the value and limitations of the "stall speed" concept) that in the last few recoveries there has been a post-bounce deceleration, looking almost like a mini-recession. I think that's what we've just finished, and we are now in the mini-bounce following that. So yes, this is a pretty positive employment report, at least in light of the last few years. And it does add weight to my view that the US is pretty likely to avoid a near-term recession, provided Europe does not crash. But it does not change the medium-term outlook of sluggish growth and slow recovery.