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After the recession, beware the 'jobless' recovery
ritcha 03/18/2020 04:29 AM CST

The coronavirus outbreak has almost certainly triggered a recession. Probably a deep one, with massive business closures and millions of lost jobs. With luck, it will be short, with a gusher of fiscal stimulus limiting the damage. “Our economy is going to come roaring back,” President Trump said on March 17.That may be overly optimistic. Beginning in 1991, each of the last three recessions has been followed by a “jobless” recovery in which the economy starts growing again, but employers remain stubbornly resistant to hiring. Yahoo Finance analyzed Labor Department data and found after the seven recessions from 1950 through the 1980s, it took 20 months, on average, before total employment reached its pre-recession peak. But in the three recessions since 1991, it has taken an average of 51 months for the labor market to heal, or 2.5 times as long. The so-called Great Recession, which ran from December 2007 to June 2009, was the worst in modern history. It lasted for 18 months—the longest downturn since the 1930s—and total employment didn’t return to its pre-recession peak until 2014, a total of 76 months. That recession was so bad because a massive mortgage-debt bubble burst, nearly wrecking the whole financial system. Debt-induced recessions tend to be the worst type and take the longest to fix. more >>slotxo