The offical Bureau of Economic Analysis figures show the U.S. economy grew at n annual rate of 0.6% during the first quarter, so despite expectations, we're not in a recession--at least not yet. 0.6% is pretty anemic, and perhaps next quarter we'll get to negative growth. Of course it takes two consecutive quarters of negative growth to meet the technical definition of a recession, but most folks don't care about those economical technicalities anyway. We all know the real truth about the desperate straits the U.S. economy is in, right?
Well today I was working with some Bureau of Labor Statistics data on job growth (for a policy brief on free trade that I am writing), and I noticed a curious thing. First, since 1983--25 years ago--the U.S. labor force has grown by almost 1/2, from 100 million to 146 people in 2007. 1983 is significant because we had a significant recession in '83-'83--the one purposely caused by Paul Volcker to stamp out inflation (it worked, too, it's just too bad most of those folks without jobs didn't understand what they were sacrificing for). The unemployment rate hit 9.7% in '82, and stayed at 9.6% in '83. Today the unemployment rate is 5%.
That's quite a difference, but that's not what caught my attention The amazing thing is that despite the 46% increase in the size of the labor force, there were more people out of work in 1982 and '83 than there are now! 10.7 million people were out of work then, and right now it's 7.6 million people. We've increased the labor force by half, and reduced the total number of unemployed people by 30%.
Even if we do have a real recession, it won't rival the big one 25 years ago. We don't recognize just how little it hurts right now.