Recovery? Despair? Somewhere in between?
Job losses slow down
The chart shown above highlights job losses from the last year of the Bush administration (red) to the first year of the Obama administration (blue). As you can see, through 2009 the economy was still hemorrhaging jobs but the rate of doing so had slowed down. This started during the first month of the Obama administration. These two events are not necessarily connected as the economy is subject to many more factors than whomever is sitting in the Oval Office.
Taking away the politics for a second this chart does show an economy that is on a tentative path to recovery. Or it could be that most of the jobs that were going to be lost have already been lost and there is no way to go but up. I doubt that because the employment rate can get a lot worse than 10%.
Is the glass half empty or half full?
The question remains though, are we really on the path to a recovery or is this a false hope? I spoke to a person who works in the commercial real estate industry. You may have heard that they are having a few problems lately. He told me that they are seeing more leasing activity in the last six weeks than they saw in all of 2009. Last year companies were frozen like a deer in the headlights, afraid to even move. Having survived a year in which falling into another Great Depression seemed possible, companies are starting to feel that the worst is behind them. I hope they’re right.
When do the jobs return?
Unfortunately these tentative steps towards recovery have not, at this point, resulted in a great deal of hiring new people. That will likely be delayed another year. But remember folks, this is typical in a post recession recovery. House Minority Leader John Boehner keeps complaining that Obama is doing nothing about the unemployment rate. Every time I see him do that I would like to shove the following chart in his face. (Please bear with me with all these charts.)
Please note the above is slightly skewed since the top one is for 4 years and the bottom one is for 8.
Much was made last year of the unemployment rate hitting 10%, how it was the first time it was this high in 26 years. Guess who was president the last time the jobless rate was over 10%? That’s right, it was Reagan, TWO years into his first term. In fact, the unemployment rate kept rising under Reagan and did not drop to the level it was at his inauguration for 3 and 1/2 years. I am not saying this to rip Reagan, I voted for him twice. He also took over a bad economy. (Although not as bad as the one Obama inherited.)
I am merely demonstrating that recoveries take time and the deeper the fall the longer it takes. So it is highly disingenuous of Boehner and his Republican cohorts to pile on Obama about the recovery when this is the path that recoveries have taken, even when the leader was their hero, Ronald Reagan. They make it seem that Obama invented a 10% unemployment rate and this has never happened before. Shame on you John, you know better.
A little less bad-mouthing and a lot more touting of how things are getting better would go a long way to actually helping the economy get better. But that wouldn’t help the minority party much in the upcoming midterm elections so where’s the fun in that? Once again, loyalty to party rises above loyalty to country.
A reader commented that we are still losing 400,000 jobs per month. That is not the case. The chart above may not be clear enough so below I have a chart from CNN using data from the US Labor Department.
It is clear that while we are still losing jobs the rate has slowed down dramatically from a year ago. Last month 20,000 jobs were lost. Still not good but as I stated above it is a trend in the right direction and follows the pattern of earlier post-recession recoveries. And as in earlier recoveries there will be a lag between this and seeing significant improvement in the unemployment rate.