Mother of All Jobless Recoveries, Continued

There is considerable evidence that the economy is steadily recovering and that the odds of a double-dip recession have shrunk to practically zilch. Unfortunately there is also considerable evidence that the recovery will not have the firepower to dramatically shrink unemployment to its pre-recession levels for years. Besides the sheer size of our unemployed ranks (27 million Americans are considered un- or under-employed today) there are at least three underlying reasons to believe in a jobless recovery:

1) Job openings are still in the doldrums -- February 2010 job openings were practically equivalent to their February 2009 levels of 2.7 million.

2) Part-timers grew in the latest jobs report (although discouraged workers fell, meaning more Americans are feeling confident at least about entering the job market) and the work week at 33.9 hours/per is still near its all-time low of 33.0. That means that when demand starts coming back, employers will have a lot of slack to extend the work week and hire part-timers rather than dip into the ranks of the officially unemployed -- that 9.7% figure the media focuses on.

3) The ratio of unemployed-to-new hires, a good indicator for strife in the job market, ticked up in February and is hovering around its April 2009 levels. Its three-month moving average is heading in a positive direction, but slowly.

And then this. According to the Business Roundtable's CEO Survey, 75% of executives expect sales to rise in the next six months, but hiring is a different story. In the coming months, half of employers expect no change in employment, 29% expect to hire and 21% expect to shrink payrolls. Employment is a lagging indicator of the economy's strength, because employers won't hire en masse until they actually experience (as opposed to project) sustained sales increases that grow capital they can invest in compensating new workers. But this survey suggests that while employers can spot glimmers of demand's recovery, they aren't any more ready to expand payrolls than they were some months ago.

Some graphs from the Bureau of Labor Statistics help tell this two-part story:

1) Employers are not firing...

Not firing.png2) But they're also not hiring.

Not hiring.png

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In