Posted on | June 19, 2010 | 8 Comments
Here’s a handy little chart showing the pattern of job losses in recessions since World War II:
That big red line is the current recession, and Scott Stoddard of Investor’s Business Daily explains:
Job recoveries have been increasingly sluggish over the past several recessions and the current downturn looks to be the longest since at least World War II. . . .
Today’s jobs slump, already at 29 months, could last five years or more, analysts say. Employers are expected to stay cautious amid a sluggish economic recovery.
“It would be strange but not inconceivable” for employment to fall short of its pre-recession peak before the next downturn, said Don Rissmiller, chief economist at Strategas Research Partners. . . .
OK, here come the magic words:
Rissmiller and other economists say a double-dip recession is unlikely. Yet hiring remains painfully slow. Excluding temporary hires for the 2010 Census, the economy has added about 500,000 jobs so far in 2010. The U.S. will need to add about 8 million jobs just to get back to the December 2007 peak, when the recession started.
Excluding the soon-to-disappear Census jobs, employers would need to average nearly 300,000 new jobs a month for the next 27 months just to get to the pre-recession peak by the end of 2012. . . .
Read the whole thing. Everybody keeps saying that a double-dip recession — that is, a “W”-shaped recession, instead of a “V” — is “unlikely.” Right, and if trends turn downward again, I’m sure that will happen unexpectedly.
Speaking of which, what about an unexpected debt crisis?
Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing.
“Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said. . . .
“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”
UPDATE: Classic Obamanomics: Blame Republicans!