In our opinion: The new normal? Slow climb of recovery presents curious challenges
Charlie Riedel, AP
Friday's employment report from the Bureau of Labor Statistics was, for the third straight month, full of good news for job seekers. According to the BLS, payrolls rose by 227,000 jobs in February, and significant upward revisions to earlier BLS reports shows that job growth, particularly in the private sector, has been steady throughout the year.
For years we've been hearing about a jobless recovery — a period characterized by aggregate economic growth but lagging employment. Oddly enough, it looks like the economy may have entered into the opposite (and unsustainable) phase — a period characterized by growing employment but now with lagging economic growth.
Just as the sunny BLS report was capturing headlines, economists at Goldman Sachs, Macroeconomic Advisers and J.P. Morgan Chase were all lowering their economic growth projections. Why the gloom? A surging trade deficit and faltering productivity. As Michael Feroli, chief economist at J.P. Morgan explained to clients, productivity is now falling behind growth in GDP.
And over at the Bureau of Economic Analysis, not only does it appear that the trade deficit has soared, but personal income appears to be down and personal consumption is flat. Consequently, as many savvy economic observers consider Friday's job report in context they can't help but remember that just last spring we had three months of similar job growth that was stymied by shocks from natural disaster, high oil prices, uncertainty over European debt and a gridlocked Congress.
This long slow climb of recovery, which some have dubbed the "new normal," presents some very curious challenges — not just for the American economy, but also for the American family.
For example, what began as a "man-cession," (a recession where male employment was hit particularly hard) has now become a "she-covery"(where female employment is outpacing male employment). According to the latest BLS report, since the recession began in December 2007, all things totaled, female employment has fallen 1.8 percent while male employment has fallen 3.8 percent. This trend has significant implications for family dynamics.
Indeed, slowing trends in family formation are undoubtedly due in part to the disparate unemployment picture between young males and females. The unemployment rate for males ages 20 to 24 is now 15.6 percent (up from January) versus a corresponding female unemployment rate of 11.7 percent (down from January).
And despite what some politicians say, higher education continues to be highly linked to employment. The unemployment rate for those with a bachelor's degree or higher is a modest 4.2 percent with a 76.4 percent participation rate in the civilian labor force, while only 59 percent of those with a high school diploma participate in the labor force and struggle with an 8.3 percent unemployment rate. The fact that more women are graduating from college than men, and that this trend is accelerating in both directions, only accentuates the new employment wedge that appears to be growing between men and women.
Our hope is that the economy can find some more harmonious balance between overall growth and employment. But even with decent employment news, it is obviously difficult for the American economy to come out from under the overhang of the latest recession. This seems particularly true for men — and acutely so for young men. More growth-oriented policies might help promote overall increased growth and productivity, but far more than economic policy will be required to address the social imbalances that seem to be taking root in the "new normal."
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