By Reid Kanaley The Philadelphia Inquirer
The jobless figure for May — 6.3 percent, same as April — means the economy is improving, but slowly, the experts say. Is this what an economic recovery is supposed to feel like?
This month marks five years since the end of the Great Recession. Starting with a chart about the job numbers, CNN Money presents 17 visuals to illustrate the recovery. Unemployment has fallen from 10 percent in late 2009; gross domestic product has wobbled; stocks have soared; mortgage foreclosures have plummeted. This description of spending is instructive: “Amid slumping home prices and rising unemployment, consumers scaled back their spending during the recession. Stimulus programs temporarily boosted auto sales and home purchases in 2009, but since then, spending has picked up only gradually, as consumers focused on paying down debt instead.” tinyurl.com/recoverycharts
Low-wage jobs have dominated the economic recovery, according to the chatter in this Daily Ticker report on Yahoo Finance. Citing the National Employment Law Project, writer Bernice Napach notes that “low wage industries employ 1.85 million MORE workers now than at the start of the recession while mid- and higher-wage industries employ 1.83 million LESS.” There ought to be a law, say some commentators. “I hate the idea that (a higher minimum wage) has to be mandated,” Henry Blodget says in the accompanying video. “But until we can convince the owners of companies . to take some of that profit and share it with the folks who are creating that value … we need a higher minimum wage.” tinyurl.com/lowwage
So what is an economic recovery? Investopedia.com, a repository of economic definitions, notes: “Some confusion commonly results from the use of both leading and lagging indicators in analyzing whether an economic recovery is in progress.” Though the stock market may have helped signal the end of a recession years ago, employment was always likely to be a laggard: “Unemployment often remains high even as the economy begins to recover because many employers will not hire additional personnel until they are confident there is a long-term need for new hiring.” tinyurl.com/recoverydefinitions
Boom, bust, repeat. While the economy does seem to be in recovery, you can be sure it can’t “recover” forever, since most economists see booms and busts as the highs and lows of a never-ending cycle. “Recessions are a normal part of the business cycle, and so are economic recoveries,” says this entry at InvestingAnswers.com. tinyurl.com/recoverycycles
For a primer on the unemployment rate, what it means, and why it stays high after a recession, see this page by Kimberly Amadeo at About.com. tinyurl.com/aboutunemployment