In December 2007 the economy was on the precipice of the Great Recession. Just how far in the rear view mirror is the deep downturn? It likely depends on your vantage point. Many families have yet to recover from foreclosed homes, lost jobs, and long bouts of unemployment. On Main Street, where most workers rely on their jobs and paychecks to make ends meet, many continue to struggle as wages have barely budged. On the other hand, since the recovery began in June 2009, Wall Street has been booming, corporate profits have rebounded, and the wealthy are doing well.
The good news is that the economy has generated a net gain in jobs for over five years. Even so, gains have been fairly modest on a month to month basis. In total, the U.S. economy lost 8.7 million jobs over the downturn—losing and then regaining that number of jobs took well over six years. Today there is a net positive of 5.1 million (or 3.7%) more jobs in the U.S. economy compared to December 2007—just prior to the crash.
Many pundits and economists have recently been reporting that the economy, as measured by the unemployment rate, is at near full-employment. The Federal Reserve Board’s Open Market Committee (FOMC) decided not to raise interest rates at its April 2016 meeting. However, the FOMC made it clear that a rate hike will be considered at its next meeting in June 2016. But, one should proceed with caution as many economic indices have yet to regain their pre-recession levels even as improvement continues in the job market—which suggests some cyclical slack remains. Also, economic output (GDP), which has been lagging since 2008, is yet to catch up to its potential.
In this brief we analyze labor market trends since the Great Recession in the U.S. and in California. We contextualize many indicators as we enter the ninth year since the onset of the Great Recession and approach the seventh year of official recovery (June 2016).