The recession officially ended in June 2009, which means we’ve seen just over 3 years of recovery. GDP has finally passed the peak from before the recession. Yet it doesn’t quite feel like recovery, at least here in California. Saw another graph that shows why it feels so odd.
In a graph called The Zero Recovery, Tim Kane calculates the number of people who are employed as a percentage of the population. For the last six recessions he tracks the change in the employment to population ratio from the start of the recession. For the previous five recessions the drop wasn’t as severe as this one and there had been substantial recovery by the 4½ year point after the start of the recession.
For our most recent recession, the participation rate dropped sharply for two years. That alone makes this the worst recession of the other five since 1970.
Since that sharp drop off, there’s been no recovery in the participation rate. In the last 30 months the change in participation rate has bounced between -4% and -4.5%. If you smoothed it out it’s a horizontal line.
If you look at employment instead of GDP you will be uneasy. This graph illustrates why you may be feeling that.
My previous posts:
- Does it feel like the recession is over? Here’s a graph to show why you said no
- Again, here’s why it feels like the economy hasn’t recovered
- Q: Why does it feel like the economy hasn’t recovered yet the stats say it has?
- The recession officially ended in June 2009
- Is it possible we are not heading into a double dip recession? In this September 27, 2011 post I commented on new construction in a strip center near my home. A year later the small building is still not done. Construction crews are only on site once in a while. Not exactly the hurried pace I would expect in a recovered economy.