Nothing can illustrate the fragility of the current recovery more than the fact that even after two solid monthly increases in payroll employment, the economy has added a grand total of only 31 jobs in the 29 months since the official November 2001 trough. No, that’s not a typo and it’s not an abbreviation for 31,000 or 3,100—it’s just plain 31. In other words, in a period covering 29 months of recovery, there are basically no more people working than when the last recession ended.
In the first 29 months of the last seven cyclical expansions employment rose by an average of 7.2 percent including one cycle that peaked at 24 months. If, in the current expansion, employment had increased at the 7.2 percent past average, there would be 9.4 million more jobs in April than the number reported by the BLS. In order to reach that level, jobs, on average, would have had to rise by 324,000 per month for all of the 29 months of this expansion. It actually exceeded this number in only one month—March of this year.
The lack of new jobs is reflected in a similar weakness in wage and salary gains. In the first 28 months of the five prior recoveries, the rise in wages and salaries averaged 68 percent of the increase in disposable personal income (DPI). In the current cycle the portion of DPI growth accounted for by wage and salary increases is only 29 percent.
Yet, despite the lack of employment and wage growth, consumer spending has held up unusually well both during the recession and recovery. The data indicates how consumer spending in the current expansion is unusually dependent on income other than wages and salaries, and on non-DPI items such as the major tax cuts and the lengthy period of extremely low interest rates that engendered soaring asset values, record debt, a low savings rate and hundreds of billions of dollars of REFI cash-outs.
Tja Lehna, natuerlich sind solche Zahlen eine Luege (*ggg*)
