Economist Prieur de Plessis (http://www.roubini.com/author/prieur_du_plessis) posted an item in his blog last week pointing out that in the last decade of ‘noughties’ US employment stagnated.
I posted a chart about the decade of zeros in the context of the Dow Jones Industrial Index a few days ago. There are a number of economic statistics conveying the same message. The chart below, courtesy of The Washington Post, illustrates that US job growth expanded at a healthy rate for most of the last 70 years, but stagnated in the first decade of the new millennium as two recessions during this period took its toll. “… gross domestic product, was weak. And household net worth, when adjusted for inflation, fell as stock prices stagnated, home prices declined in the second half of the decade and consumer debt skyrocketed,” said the report in the Post.
job-growth5.jpg
Indeed, the Great Recession took so much toll on US jobs that employment levels are back to the beginning of the decade as a result.
But measuring economic growth, profits or employment by decades is not very helpful or scientific. As I explain in my book, The Great Recession, the measurable cycles that matter in modern capitalism are spread over 16-18 years, for profitability, house-building and stock prices.
During the up phase for profitability between 1982-1997, economic growth was better than in the down phase of 1964-82. In the current down phase that began for profitability in 1997 and started for stock markets in 2000 and should last until 2014-16 or so, real GDP and employment growth can be be expected to be well below par and certainly much lower than in 1982-00 or compared to the ‘Golden Age’ of modern capitalism from 1946-64. The de Plessis/Washington Post graphic does not reveal this very well.
We may be in ‘recovery mode’ for capitalism after the Great Recession of 2008-09, but this recovery will be weaker than previous ones and will grind to halt by 2012 or so.
Michael Roberts Blog 