One trillion dollars and two million jobs missing from Obama’s economy
Here’s James Pethokoukis:
1. Annual US GDP growth, adjusted for inflation, has averaged an anemic 2.1% for the 15 full quarters of recovery, versus 5.1% during the same span after the severe 1981–82 recession.
2. As a result, the economy has yet to return to anywhere near its pre–Great Recession growth trend. If it had, the economy would be $1 trillion bigger today.
3. This recovery has seen the weakest increase in real disposable income of any of the seven most recent recoveries, according to ITG Market Research.
4. The average US household has recovered a mere 45% of the wealth lost during the Great Recession, according to the St. Louis Fed.
5. The economy has 2 million fewer private-sector jobs than it did at the January 2008 peak.
6. Of course, if average monthly job gains remain close to the last twelve months’ average of 180,000, then private-sector payrolls will hit an all-time high in just under one year. But even then, job levels will still be far below where they would be if the trend from 1990 through 2007 had continued, a shortfall equaling nearly 12 million missing workers.
7. If not for a collapse in the labor-force participation rate — mostly due to weak labor demand rather than demographics, according to Goldman Sachs — the unemployment rate would be at least 9%, not 7.5%.
8. The broader U-6 jobless rate, which includes some discouraged workers and part-timers who would prefer full-time gigs — is just shy of 14% vs. 8% pre-recession.
9. There are 4.4 million Americans — a whopping 37% of the total unemployed population — who’ve been unemployed for 27 weeks or longer. This group, given skill erosion and hiring bias, could become a large permanent pool of jobless Americans.
The stock market may be high as Wall Street and certain big companies bask in the largesse of taxpayer-funded crony capitalism, but on the ground, on Main Street, things are not nearly as rosy.
Oh, and as a reminder . . .
remember, the administration told us the jobless rate was going to be 5.1 percent in May 2013, not 7.6 percent.