Good job growth in a bad economy
The economy added 244,000 jobs in April. It also added 50,000 more jobs than we thought during February and March. Aside from a few months in the spring of 2010, when the job numbers were inflated by temporary census hires, this is the single best month of job growth we’ve had since the crash. And yet, the unemployment rate is back up to 9 percent. Normal is 5 to 6 percent. We can add 244,000 jobs a month and not be back at normal till about 2017, at the earliest. And there’s no guarantee we’ll continue to add 244,000 jobs a month. First-quarter GDP growth was slow, housing is weak, energy costs are climbing and we’re seeing a surge of people newly filing for unemployment insurance. So things might be getting better before they get worse.
The recovery has been much swifter, and much more sustained, on the corporate side. They’re not just nearing normal. They’ve left normal in the dust. Yesterday, Fortune magazine released its annual Fortune 500 list. Their press release came armed with a remarkable statistic: “The combined profits of the Fortune 500 increased by 81% — $318 billion — this year, the third largest percentage gain in the list’s history.” Compare that to the unemployment rate, which fell by just 8 percent over the past 12 months.
It’s not just tempting to say that the recovery has been good for firms and bad for people. It’s true. When Gallup polled Americans making less than $30,000, almost half thought we were in a depression and another 19 percent thought we were in a recession. Only 21 percent thought we were growing. As for people making more than $30,000, about a quarter thought we were in a depression and another 30 percent thought we were in a recession. Fewer than a third said we were growing. The economy, by the way, is growing. It’s been growing for two years now. But for most people, it’s not getting better.