Tuesday, November 8, 2011

Slow job growth

I've mentioned our nation's unemployment problem here before, and I see a version of this chart every month when the jobs report comes out, but it still bears sharing every once in a while. This month, we've got two different lines here, showing how long it will take our economy to get back to pre-recession employment levels, assuming two different average rates of job growth (one low, one more ambitious).

Even in the more ambitious case, you can see that we won't return to pre-recession levels for another 30 to 35 months, putting us in mid to late 2014 at the earliest. In the slower growth environment, it would take us until nearly 2016. For those counting at home, that's almost a decade of lost economic activity, a fact that shows just how long and painful a deleveraging process can be for an economy of our size.

Worse yet, these charts don't even consider the annual increase in the labor force as more and more debt-laden students graduate from college--over the course of a decade, those numbers will be significant, and we'll need to create many more than just the 125k or 200k monthly jobs that are charted here in order to keep pace. So, for those in Washington who think we can "solve" our deficit/debt crisis by simply assuming higher growth, you might want to take a look at this chart and reconsider.

Oh... and I haven't even mentioned the off-balance sheet liabilities of Social Security and Medicare yet... it's cool, nobody's planning on retiring in the next decade, right?

[Calculated Risk]

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