05 June 2014

This Jobs Recovery Has Quietly Crept Up on the Record for Longest Expansion

Tomorrow's job report will probably extend the streak of months with uninterrupted job growth to 44, placing it 3rd among recorded streaks in these United States. (The data only goes back to 1939.) By the time July's numbers come in, this recovery should tie for second; by the time September's numbers come in, this recovery could hit its 4th anniversary and be tied for first.

The rate of job creation has been okay - only slighter better than the recovery in the mid-aughts. Everyone has been complaining about it the whole time. And of course it comes on the heels of the worst recession since we began collecting monthly data, making its gradual improvements seem paltry. But it is nonetheless quietly edging towards a new record. This recovery is not just long: it shows little sign of ending soon.

The global economy is steadily recovering from the Great Recession. Emerging markets from Africa to India show great promise. Europe's debt default talk has quieted. Abe's policies are waking Japan's economy for the first time in decades. All that will help the American economy.
Unemployment here in the US is still moderately high and inflation relatively low: this recovery has yet to show the signs of overheating that we saw towards the end of the three other long recoveries. The unemployment rate at the end of the runs in the 80s, 90s, and aughts was 5.2%, 4.0%, and 4.6%. At the rate our unemployment rate is dropping, it will take us another year or two to reach those levels, suggesting that we won't run out of slack anytime soon. In fact, our unemployment rate of 6.3% may well rise to 6.4% tomorrow. 

Of course this run of uninterrupted job gains could end next month. One thing that every one of the three other recoveries share in common? They ended in summer, in June or July. Perhaps summer is the time when the beach looks more alluring than a cubicle. But I think that's a beach blanket that won't be spread out until next summer, when this recovery is closer to 5 years old.

Yes, it's a fool's errand to forecast the movement of something as unwieldy as an economy a year into the future. But what's the use of blogging if you can't do fool's work?

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