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A Tale of Three (or Really Two) Recoveries



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Maybe President Obama’s speech was so lacking in energy and confidence last night because he had already seen this morning’s jobs numbers. It’s a pretty grim report, and it brings into relief the grave problem he has in trying to persuade the public that we are on the right track.

Here’s a sense of that problem in three charts. These charts look at the employment-population ratio (basically the percentage of the working-age population that has a job) in the five-year periods surrounding the recessions of the early 80s, the early 90s, and today — and as noted in the charts, the shaded areas denote the actual period of the recession.

The recession of the early 80s saw a collapse of employment no less daunting than that we have just experienced — in fact, although we are frequently reminded that the last recession was the worst since the Great Depression (which is true in some respects), unemployment reached 10.8 percent in the last two months of 1982, a good bit higher than anything we saw in the last recession. But once it was over, employment began to rise very quickly, and the five-year period depicted here ends with a higher employment-population ratio than it began with.

The recession of the early 90s was far less severe and significantly shorter, though the recovery took a little longer, but again the five-year period surrounding it showed a drop and then a rise.

In the period surrounding the latest recession, we have seen the drop but not the rise. Maybe it’s coming, maybe it’s not, but today’s jobs report once again makes clear it certainly isn’t here.

“Stay the course” is going to be a very tough message to champion this fall.



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