Long, but getting shorter.

Photographer: Craig Warga/Bloomberg

Not the Scariest Jobs Chart Ever

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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Every Jobs Day during the past recession, and for several years after, Bill McBride of the blog Calculated Risk compiled what Business Insider came to call "the scariest jobs chart ever," a comparison of the payroll employment trajectories during every recession since World War II. He made the last one after the May 2014 jobs report, when employment finally rose above its pre-recession peak. It looked like this:

source: calculated risk

In short, it was a really bad recession, far and away the worst since the 1930s.

QuickTake Monthly U.S. Jobs Report

But what about the recovery? How's that going? I took the opportunity of today's jobs data release to compare the growth in payroll employment since it bottomed out in February 2010 with the growth in payroll employment after past recessions.

For the sake of readability I didn't chart every recovery since World War II, going instead with the five most recent -- skipping the one that began in July 1980 because it only lasted 12 months. And I date my recoveries from the month when employment hit bottom, which doesn't always coincide with the recession dates set by the National Bureau of Economic Research. The NBER says the first recession of the new millennium ended in November 2001, but payroll employment didn't start rising until late 2003.

The clearest takeaway here is that the current jobs recovery looks an awful lot like the last two -- much slower and steadier than the boom of the Reagan years and the even steeper and more erratic rise during the Ford and Carter presidencies. Look at McBride's chart and you can see that the pre-1975 recoveries were similarly steep. Something changed after the 1980s; my guess is that it was some combination of the disappearance of manufacturing jobs -- which tended to be cut back sharply in a recession and added back rapidly during the subsequent rebound -- and an increasing corporate focus on productivity, driven by pressure from Wall Street, that has made managers wary of hiring even when the economy improves.

This may be the wrong way to look at it. Because the last recession was so much more severe than the previous two, there was much more ground to regain this time around -- and as my colleague Mark Whitehouse pointed out this morning, we're still a couple million jobs away from regaining it. There are those who argue that state and federal fiscal austerity have weighed on job growth since the recession; there are also those who argue that new "subsidies and regulations intended to help the poor and unemployed" have perversely held back the recovery.

Still, I think it is worth dwelling on how the current jobs recovery is unfolding at almost exactly the same pace as the last two. Maybe this is just the way the job market works now. And while the recovery that began in 2003 is now seen as something of a bust, the 1990s are looked back upon fondly as a time of widespread prosperity. That's because the 2000s jobs recovery didn't last very long -- as you can see from the above chart, it had already given way to a new recession by this point. The 1990s version, meanwhile, went on and on and on.

So that's really the key. If the economy keeps adding 200,000 jobs a month for the rest of this year, and next year, and the year after that, this will start looking like a pretty great economic recovery. But we're not there yet.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author on this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net