Nonfarm Hires Jump 64.7 Percent from 4.656 Million in Mar 2020 to 7.670 Million in Jun 2020, Higher by 16.8 Percent Than 6.564 Million in Jun 2019 In the Global Recession, with Output in the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown of Economic Activity in the COVID-19 Event, Seventeen Million Fewer Full-Time Jobs Relative to Working Population in the COVID-19 Event, Recovery Without Hiring in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Youth Unemployment, Middle-Age Unemployment 190.6 Percent Higher in Jul 2020 Than in Jul 2007 In the Global Recession, with Output in the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown of Economic Activity in the COVID-19 Event, Increase of US Consumer Prices at Annual Equivalent 7.4 Percent in Jul 2020 with Inflation Worldwide, Growth of US Exports at 9.4 Percent in Jun 2020 and Imports at 4.7 Percent, World Cyclical Slow Growth, and Government Intervention in Globalization: Part II
Carlos M. Pelaez
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
IA1 Hiring Collapse
IA2 Labor Underutilization
ICA3 Seventeen Million Fewer
Full-time Jobs
IA4 Theory and Reality of Cyclical Slow
Growth Not Secular Stagnation: Youth and Middle-Age Unemployment
IC United
States Inflation
IC Long-term US Inflation
ID Current US Inflation
II United States International Trade
III World Financial Turbulence
IV Global Inflation
V World Economic
Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk
Financial Assets
VII Economic
Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great Inflation
IIIB Appendix on Safe
Haven Currencies
IIIC Appendix on
Fiscal Compact
IIID Appendix on
European Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit Financing of Growth and the
Debt Crisis
The magnitude of the
stress in US labor markets is magnified by the increase in the civilian
noninstitutional population of the United States from 231.958 million in Jul
2007 to 260.373 million in Jul 2020 or by 28.415 million (https://www.bls.gov/data/). The number with full-time
jobs in Jul 2020 is 121.198 million, in the global recession, with
output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event, which is lower by 2.021
million relative to the peak of 123.219 million in Jul 2007. The ratio of full-time
jobs of 123.219 million in Jul 2007 to civilian noninstitutional population of
231.958 million was 53.1 percent. If that ratio had remained the same, there
would be 138.258 million full-time jobs with population of 260.373 million in Jul
2020 (0.531 x 260.373) or 17.060 million fewer full-time jobs relative to
actual 121.198 million. There appear to be around 17 million fewer full-time
jobs in the US than before the global recession while population increased
around 28 million. Mediocre GDP growth is the main culprit of the fractured US
labor market augmented in the global recession, with output in the US reaching
a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event.
There is
current interest in past theories of “secular stagnation.” Alvin H. Hansen
(1939, 4, 7; see Hansen 1938, 1941; for an early critique see Simons 1942)
argues:
“Not until the problem of full employment of our productive resources
from the long-run, secular standpoint was upon us, were we compelled to give
serious consideration to those factors and forces in our economy which tend to
make business recoveries weak and anaemic (sic) and which tend to prolong and
deepen the course of depressions. This is the essence of secular
stagnation-sick recoveries which die in their infancy and depressions which
feed on them-selves and leave a hard and seemingly immovable core of
unemployment. Now the rate of population growth must necessarily play an
important role in determining the character of the output; in other words, the
com-position of the flow of final goods. Thus a rapidly growing population will
demand a much larger per capita volume of new residential building construction
than will a stationary population. A stationary population with its larger
proportion of old people may perhaps demand more personal services; and the
composition of consumer demand will have an important influence on the quantity
of capital required. The demand for housing calls for large capital outlays,
while the demand for personal services can be met without making large
investment expenditures. It is therefore not unlikely that a shift from a
rapidly growing population to a stationary or declining one may so alter the
composition of the final flow of consumption goods that the ratio of capital to
output as a whole will tend to decline.”
The argument
that anemic population growth causes “secular stagnation” in the US (Hansen
1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early
dissent see Simons 1942). This is merely another case of theory without reality
with dubious policy proposals.
Inferior performance
of the US economy and labor markets, during
cyclical slow growth not secular
stagnation, is the critical current issue of analysis and policy design.
Chart I-20, US, Full-time Employed, Thousands, NSA, 2001-2020
Sources: US Bureau of Labor Statistics
Chart
I-20A provides the noninstitutional civilian population of the United States
from 2001 to 2020. There is clear trend of increase of the population while the
number of full-time jobs collapsed after 2008 with insufficient recovery as
shown in the preceding Chart I-20.
Chart I-20A, US, Noninstitutional Civilian Population,
Thousands, 2001-2020
Sources: US Bureau of Labor Statistics
Chart
I-20B provides number of full-time jobs in the US from 1968 to 2020. There were
multiple recessions followed by expansions without contraction of full-time
jobs and without recovery as during the period after 2008. The problem is
specific of the current cycle and not secular.
Chart I-20B, US, Full-time Employed, Thousands, NSA,
1968-2020
Sources: US Bureau of Labor Statistics
Chart
I-20C provides the noninstitutional civilian population of the United States
from 1968 to 2019. Population expanded at a relatively constant rate of
increase with the assurance of creation of full-time jobs that has been broken
since 2008.
Chart I-20C, US, Noninstitutional Civilian Population,
Thousands, 1968-2020
Sources: US Bureau of Labor Statistics
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
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