Random thoughts about current events
That question seems to be on a lot of minds lately. So, how do we answer it? One way would be to look at the employment picture. To start with, I plotted private sector employment data (from bls.gov) spanning 2000 to present and estimated the employment growth rate after employment bottomed out in 2003 and in 2010:
The private sector added jobs from mid-2003 to mid-2007 at an average rate of about 153,000 jobs per month and added jobs from early 2010 to May 2012 at a rate of about 157,000. So private sector job recovery rates for the past two recessions are comparable.
Next I looked at total private sector job losses (or declines in total private sector employment) and job loss rates for the last two recessions. We lost over 8.8 million private sector jobs at a rate of about 354,000 jobs per month in the latest recession while we lost 3.4 million private sector jobs at a rate of 111,000 jobs per month in the prior recession. So the total private sector job loss was over 3 times higher in the latest recession compared to the previous recession and the rate of job loss was about 2.5 times greater. If we can manage to continue to increase private sector employment at a rate of 157,000 jobs per month, we will reach the former peak employment by 4Q2014.
Finally I looked at government employment data and noticed that employment at the local level was following a different pattern after the latest recession than it had after the prior recession:
Prior to the latest recession, local government added jobs fairly steadily with only a small slowdown in 2003 but after the latest recession, local government employment started declining and it continues to decline. So after the latest recession, local government contributed to job losses while they contributed to job gains after the prior one.
Anyway, based on the employment picture, I suppose the economy could be doing better but it could also be doing worse and that’s pretty much the definition of “fine”.