22 months of job gains

Today’s GDP report showed that the US economy grew at an annual rate of 2.8 percent in the 4th quarter of 2011. This is slightly above the long run average of 2.5 percent, but well below what is needed to really turn the job market around and significantly reduce unemployment.

When looking at GDP, people are often curious to see how it translates into jobs. One interesting part of the puzzle is that GDP is higher than it has ever been, but we have 6 million fewer workers making the goods and services that comprise GDP. This means people are becoming much more productive in their jobs.

Still, efficiency gains can go only so far, and eventually businesses need to hire. So, I thought I would take a closer look at monthly changes in non-farm private employment since the start of the Great Recession in December 2007. The following chart shows that job losses grew quite quickly from then until January 2009, when the economy lost 841,000 jobs from the preceding month. After that low point, the employment market contracted slower, and has actually added jobs for the past 22 months. The recovery is here…..its just too slow.

Source: Bureau of Labor Statistics

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