The Recovery You Haven't Seen Is Even Less Than Meets the Eye


You really need to keep up these days. I wasn't aware that there even was an economic recovery, and yet it turns out the recovery is so mature it's already getting a backlash.

In The Washington Post, Neil Irwin offers a rebuke to unnamed experts who are declaring a new boom:

That great March job number, for example, received a short-term boost from temporary Census Bureau hiring and the rebound from February snowstorms, so the underlying employment growth was somewhere around 50,000 jobs—not the 162,000 that made headlines, and far below the 130,000 or so jobs needed to keep up with population growth. The number of people filing new claims for jobless benefits each week has remained stubbornly around 450,000, well above the levels expected in a hiring boom.

And while the stock market is up a lot, it has rebounded from generational lows.

Has there been some redefinition of the word "generation" lately? My dictionary still uses the old "roughly 30 years" standard as the length of a generation. I understand the accepted length of a generation has been falling in this fast-moving age (which makes no sense, given that life spans and average ages for reproduction have been increasing), but even if you define a generation as only 15 years that puts us in the wayback machine to 1995, when the Dow Jones Industrial Average wowed a nation by breaking through the barrier of 5,200. Since the beginning of the current recession, the lowest the DJIA has dipped was 6,627 in March of last year. The previous low point came in September 2002, when the index sank to 7,528. The DJIA's rebound from 6,627 to 11,123 in a little more than a year is as impressive as it is dubious, but it is not a recovery from a generational low even in dog and cat generations.

Graham family kremlinologists will note that this article completes an alley-oop with the cover story for the current issue of Newsweek, which boldly announces that America's back. That piece, by Daniel Gross, contains much fine material, including:

* Sociological hot buttons of yesteryear: "There will likely be fewer McMansions with four-car garages and more well-insulated homes, fewer Hummers and more Chevy Volts, less proprietary trading and more productivity-enhancing software, less debt and more capital, more exported goods and less imported energy." (Daring prediction on the Hummers, given that the brand has been discontinued.)

* Strawman arguments 401 years in the making: "To hear some critics tell it, things have been going south in this country since the cruel winter in Jamestown, Va., in 1609, when most of the settlers died."

* Now-we've-got-em-right-where-they-want-us triumphalism: "In 2008 and 2009 it took the U.S. just 18 months to conduct the aggressive fiscal and monetary actions that Japan waited for 12 years to carry out."

* Clinton-era bold visions of the future: "Beyond creating jobs for those who built and maintain it, the Internet functions as a powerful platform on which all sorts of new businesses—and ways of doing business—can be rolled out."

* Optimism about an industry where the United States now has only one private-sector player: "A similar dynamic is playing out in the wounded auto industry, in which even small gains in efficiency can produce big economic gains."

Where is all this sunshine coming from? Calculated Risk refers to the old equation for Wall Street analysts: Bearish equals unemployed.

But heck, unemployment's a lagging indicator. Will you start spending already?