Job-Less Recovery

The chart above has been widely shared by bloggers in the past week. It shows negligible job growth in the U.S. over the past decade. Jobs created by the debt boom of the first part of the decade have been repealed in just the last two years.

Next question: when are they coming back? Optimists are banking on a V-shaped recovery any day now. Typically job growth resumes within a month or two after the economy hits bottom, but research at Hussman Funds finds that the current recovery is hardly typical. If we assume that growth in GDP reported for the third quarter of 2009 marked a bottom at the end of June, then the current employment trend (illustrated by the red line below) is clearly lagging the average bounce (in blue):


In fact it more closely resembles the delayed recovery following the 2000-01 recession:


...all of which suggests that we might have another two years or more of flat to negative job growth.

Except for public-sector jobs. While private-sector nonfarm payrolls have declined by 6.625 million (-5.8%) since January 2007, total government jobs have increased by 355,000 (+1.6%). Taxes on the former (goose) pay for the latter (golden eggs), so one wonders how long that disparity can continue. Expect it to widen in 2010 as we go about the decennial task of counting ourselves.

Chris Wood at Casey Research summarizes: "the loss of employment has occurred entirely in the private sector, as Uncle Sam grows more bloated each day. If you happen to be in the private sector, it also might not psych you up too much to know that the average pay per federal worker in 2009 was reportedly $75,419, while per capita average annual income across the U.S. is only about $36,000."