Putting Our Slow Jobs Recovery Into Perspective

http://www.businessweek.com/articles/2012-05-04/putting-our-slow-jobs-recovery-into-perspective

By Peter Coy on May 04, 2012

Disappointing, but not shocking. The government’s report Friday that the economy created fewer jobs than expected in April—115,000—showed an unwelcome deceleration of America’s job-creating machine. Economists surveyed by Bloomberg News had a median forecast of 160,000 jobs created. In the big picture, though, the nearly three-year-old expansion is proceeding at the same pace as the previous two. Slow recovery, in other words, is the New Normal.

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What makes this recovery seem so frustratingly slow is that the U.S. is coming out of a deeper hole this time. In the 1990-91 slump, employment fell by 1.6 million. The 2001 slump was worse: 2.7 million jobs lost. But neither comes close to the disaster of the 2007-2009 recession, when employment fell by 8.8 million.

To put it simply, if you fall down a well, you’ll climb out faster if it’s 10 feet deep than if it’s 100 feet deep.

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“People say the economy is broken,” Paulsen told me. “It’s not. This is the New Normal. And the New Normal is 25 years old.” The New Normal, he says, goes back to the mid-1980s, when the rate of labor-force growth notably slowed.