Non-Farm Payrolls - Current Versus Previous Recoveries

Chart of the Week for May 14-20, 2004

On May 7, 2004 the Labor Department reported that the economy added 288,000 jobs in April, a surprisingly strong number considering that the market was expecting only 170,000 new jobs. So far this year the economy has added over 800,000 new jobs. This is in contrast with a very weak employment atmosphere that characterized 2002 and 2003. In fact, the US economy has just now made up all the job losses it incurred during the past two years.

The chart above shows that since World War II, the average economic recovery was accompanied by sizeable new job growth. This trend has not held true for the past two recessions. After the 1990-1991 recession, the economy continued to lose jobs for 11 months after the end of the recession and thus earned the moniker “Jobless Recovery.” The most recent recession, which ended in November 2001, exceeded that 1990-1991 milestone by continuing to lose jobs for 21 months after the end of the recession. Job creation is necessary to maintain the current pace of economic activity.

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