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Economy’s modest gains met with irreverence
Question of the Day
Call it the “Rodney Dangerfield Recovery.” It gets no respect from any quarter.
Republicans pound away at its weakness, Democrats lament it, the media chronicles its troubles, investors fret about it, and many average citizens question whether it even exists.
Polls show many people believe the economy is still in recession or getting worse. Most surveys show that people are as upset about the economy now as they were when it was in deep recession more than a year ago. Voters angry about the economy appear ready to boot out another crop of congressional incumbents for the second election in a row.
Yet the recovery has passed some milestones, however modest. It quietly celebrated its first anniversary this summer, and economists estimate it also exceeded its pre-recession peak output of $13.364 trillion for the first time, marking the turn between recovery and expansion.
Moreover, the economy added to a string of private job gains last month that have totaled 763,000 since last year — not a small number, and at a quicker pace than after other recessions.
Lakshman Achuthan, managing director of the Economic Cycle Research Institute, has dubbed it the “Rodney Dangerfield Recovery,” because it gets no respect, particularly for the relatively early onset of sustained job creation six months after the recession ended. Other economists note the same phenomenon.
“The labor market does continue to improve, despite a national pessimism,” said Ward McCarthy, an economist at Jefferies & Co. The problem is growth in jobs and the economy overall is so sluggish it is “trying the patience of policymakers and the millions of unemployed people who are seeking unemployment.”
The economy is putting in a better performance on jobs than it did after the milder 1990-91 and 2001 recessions, when the recoveries were widely described as “jobless.” The period of joblessness was particularly long after the 2001 recession — nearly two years.
“The economy has been generating jobs faster this time around,” Mr. McCarthy said. “It just doesn’t feel good because so many jobs were lost during the recession.”
Between December 2007 and December 2009, the nation lost 8.4 million jobs — fully 7 percent of those that existed before the recession.
That is more than twice as much as the share of job losses in the previous two recessions. About 3 percent of all jobs were lost during the 2001 recession, and 2 percent of jobs were lost in the 1991 recession.
Although a little over 10 percent of jobs lost in the last recession have been replaced so far during the recovery, it still feels like a “jobless recovery” to most people, Mr. McCarthy said. The number of new jobs is far surpassed by the nearly 15 million people searching for work and unable to find it.
The disparity between the thousands of new jobs available and the millions of unemployed is feeding a deepening pessimism that shows in opinion polls.
A poll by Greenberg Quinlan Rosner last month found that 35 percent believe the economy will get worse, while another 25 percent believe it is at bottom but is not improving. People are equally dismal about their personal finances and job situations.
Regina Corso, director of the Harris Poll, said surveys show that most Americans believe the job market is very poor and are pessimistic about when jobs will be easier to find, despite the recent job gains.
About 40 percent said they don’t expect the job market to start improving for a year or longer. Another 20 percent said they don’t know when the market will improve.
“Attitudes about the economy are important,” she said, because they feed into consumer spending behavior, which drives economic growth.
“Americans need to know that they will not lose their job because their company is in trouble,” she said.
“Until they feel this sense of security, there is no way that they will turn around on their attitudes towards the economy — regardless of what economists may be saying.”
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
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