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Hiring lags stretched to six years
Of nine recessions since World War II, the first six averaged six months from the bottom to the point where companies needed to hire. The 1991-92 recession took 15 months. The recession around 2001-02 took 39 months in aggregate.
The rebounds appear to be financial, not real in character. People who have money get more money much faster, while the rest do not, because there are no jobs into which they can be slotted anymore.
Who decides when a recession starts and ends?
In the United States, the National Bureau of Economic Research has a Business Cycle Dating Committee that sets the official dates of peaks and troughs. The committee looks at employment, income, spending, and production rather than a single measure. It often announces its decision many months after the turning point. A recession, in its definition, is a significant decline in economic activity spread across the economy.
What is a jobless recovery?
The phrase came into wide use after the 1991 recession, when output recovered while employment stayed low for months. It was used again after the early 2000s downturn. In these periods, companies met rising demand by raising productivity and delaying hiring. Employment surveys from the US Bureau of Labor Statistics showed payrolls lagging behind output.
Why do markets rebound before jobs do?
Stock prices reflect expected future profits, and they rise as soon as investors expect conditions to improve. Hiring depends on actual demand for what a company sells. After the 2008 financial crisis, the Federal Reserve cut its policy rate to near zero in December 2008 and held it there until December 2015. Low rates raise asset prices quickly, while employment grows more slowly.
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