Today’s disappointing jobs report requires a bit more analysis to put it in perspective. As I noted earlier, March’s 88,000 in payroll gains came in way too low, but February was a relatively strong 268,000, so you’ve got to average out the noise.
The figure below does this and provides, IMHO, the needed perspective. The punchline is we’ve got fits and starts; what we need is a trend.
The figure plots the average monthly job growth per quarter (thus smoothing out monthly bumps) over this recovery, which began in the second half of 2009, against the 1990s recovery. The current case doesn’t look as bad as today’s 88K would suggest. On average, monthly gains have been between 100K and 200K over the last few quarters.
But when you compare that to the 1990s jobs recovery, which also began with a jobless phase (though not nearly as deep as this one), you see what we’re missing. The 90’s recovery by now was on an upward trend, generating over 300K per month for a year running (which would be 350K adjusting for the size of today’s job market).
We don’t have that trend in this recovery. We had it, quite strongly, back in 2009 and 2010FH coming out of the downturn. What was different then? I’ll freakin’ tell you: the Recovery Act was in effect, helping to boost demand. It wasn’t perfect or big enough, yada-yada—but it helped, and the fact that it left the scene too soon is one reason why we’re stuck with fits/starts as opposed to a positive trend.