Strong Job Growth, a Terrible Job Market: The Bizarre 2020 Economy

The first is the equivalent to the level of the water in a bathtub; the second is whether it is filling up or being drained; the third is whether the spigot is being opened wider or closed. For the United States economy in the fall of 2020, the three measures are sending different signals:

The level of the bath water is very low. But it’s being filled rapidly. However, the spigot is being tightened so the pace at which the water is rising has slowed.

The level of economic activity is miserable. Seven months into the pandemic, most sectors of the economy are producing below — and in some cases far below — normal levels. The number of jobs on employers’ payrolls was 7 percent below February levels in September, a worse shortfall than at any point in the Great Recession. The share of the population working is only 56.6 percent, down from 61 percent a year ago and lower than it ever got during that downturn and its aftermath.

So if voters were to evaluate the Trump economy solely on how things are going as the fall of 2020 begins, it would be a harsh judgment.

If, by contrast, they were to look at the direction of the economy, things look quite good. Again, that 661,000 net jobs added — the job growth was particularly strong in health care and the retail sector — represents stronger job growth than in all but a handful of months in the modern record. Outside of this summer’s rebound, to find months of comparable improvement in the labor market, you have to go back to either a quirky month in 1983 or to the 1940s and 1950s.

So when the Trump administration points to a resurgent economy, it’s not untrue. But it’s incomplete. And that’s because of what’s happening to the rate of change.

Article source: https://www.nytimes.com/2020/10/02/upshot/2020-terrible-job-market.html