My pal Joltin’ Joe Weisenthal over at Business Insider keeps trying to make the case that the Obama Recovery is, well, if not stronger than the Reagan Recovery, at least more impressive. It’s not an easy case to make, no matter what qualifiers you add. Consider that in the first ten quarters of the OR, real GDP is up a total of 6 percent vs. 16 percent in the RR. Or to put it another way, after 10 quarters of recovery, the Reagan growth rate was 6 percent vs. Obama’s 2.4 percent vs. 4.6 percent for the average post-World War II expansion. Another factoid: In the 31 months of the OR, the economy added 1.8 million net nonfarm payrolls vs. 8.9 million during the RR.
Now Weisenthal is trying another tact. This is from a post today over at BI, referring to the above chart: “A little perspective on how good the latest jobless claims data is. On a population adjusted basis — which only makes sense, since naturally there will be more initial jobless claims each week in a bigger population — the current level of claims is better than at any point in the Reagan administration.”
Indeed, today’s jobless claims report does signal more recovery in the labor market. Initial claims for the week ending Feb. 11 fell 13,000 to 348,000, bringing the level of claims down to a new cycle low, according to JPMorgan. But let me add a bit of additional context. The jobless claims report tracks how many new people have filed for unemployment benefits in the previous week. But the hallmark of this recovery is the vast number of people who have dropped out of the labor force, a phenomenon reflected in both the collapse of the labor force participation rate and the employment-population ratio. During the RR, both measures rose as the expansion proceeded.
Another way to look at things is by how long people have been without a job. I think this chart makes a powerful case that the U.S. labor market is still a shambles:
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