Wednesday, July 27, 2005

Scrivener Rules!

Like a round of golf played by Annika Sorenstam, the Scrivener methodically destroys the par-for-the-course weak labor market arguments of the usual suspects.

... quoting Brad DeLong's ....

Four Out of Five Indicators Say the Job Market Really Is Weak It's not just employment-to-population ratios. It's real wage growth. It's the relative amount of long-term unemployment. It's payroll employment. We have four of five indicators telling us that the state of the job market is not that good and only one -- the unemployment rate -- reading green.

Such claims can be found today all over the left-liberal side of the econo-blogosphere. But are they true?

No, unsurprisingly they aren't. Not when this recovery's apples are compared with the last recovery's:

Unemployment rate

Prior recovery: 5.8%
This recovery: 5.0%

Score 1-0 for this recovery.

Long term unemployment rate (15+ weeks)

prior: 2.25%, which is 40% more than
this: 1.58%

Long-term unemployment at this point in the prior recovery was higher even in absolute terms, 2.96 million versus 2.35 million, in spite of the work force being 17 million larger today. So the current recovery is much better on this point.

Score 2-0 for this recovery.

average real weekly earnings from pre-recession high

prior: -1.9%
this: +0.25%

In fact, during the prior recovery real average weekly wages would stay below their 1990 pre-recession high for seven years, until well into Clinton's second term....

DeLong's five indicators the current recovery is up 3 to 0 right now -- already we have a winner!

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