America in Weakest Economic Recovery Since 1948, New Report Documents
(CNSNews.com) -- The United States is facing the weakest economic recovery in the post-World War II era -- the worst in over 62 years -- and this is happening despite the fact that the recession officially ended in June 2009, according to a new report from the Heritage Foundation, a conservative think tank.
The Bureau of Labor Statistics (BLS) reported a net growth of only 18,000 jobs in June, and the unemployment rate reached 9.2 percent.
Using data from the BLS, the Heritage Foundation’s July 5 report documented that the current recovery is “the weakest recovery of the post-World War II era.”
“The recession officially ended in June 2009, but payroll employment remains 6.9 million jobs below its December 2007 peak,” states the report. “The average unemployed worker has been without work for 39.7 weeks (nine months) -- the longest since the government began keeping track in 1948.”
The report explained that “[i]n past recessions, employment fully recovered within two to three years. As of May 2011 – three-and-a-half years after the recession’s onset -- payroll employment remains 5 percent below pre-recession levels. Unemployment stands at 9.1 percent.”
The unemployment rate creeped up to 9.2 in June. The real unemployment rate hit 16. 2 percent, affecting more than 25 million Americans. (The “real” unemployment rate is technically a combination of three measures of unemployment: the unemployment rate, the number of people working part-time who want full-time work, and the number of people “marginally attached” to the workforce.)
The last weakest economic recovery occurred after the recession of 2001, which faced employment rates of 1 percent below pre-recession levels 41 months after the start of the recession.
According to the Heritage report, “[e]conomists estimate that the ‘natural rate of unemployment’ in the U.S. economy is 5.2 percent.”
Because of the current sluggish recovery, the return to a “natural rate of unemployment” will take even longer, based on previous economic expansions. From 2003-2007, for example, “employers added an average of 176,000 jobs per month.” Based on this rate, “unemployment will not return to normal rates until January 2018.”
The Congressional Budget Office expects the economy to recover at approximately the same rate as the 2003-2007 period, according to the report.
Heritage further reported, “The economy needs to add between 100,000 and 125,000 jobs per month to keep pace with population growth. Unemployment will rise if employers consistently create fewer jobs than this.
“Over the past year, employment has grown by an average of just 122,000 jobs per month. If job growth continues at this rate, then the unemployment rate in January 2021 would stand at 7.4 percent. At the current rate of recovery, high unemployment will become the new normal.”