After parsing the unemployment report that was issued by the Bureau of Labor Statistics (BLS) on Friday, November 2nd, two scholars at the Heritage Foundation, Rea Hederman and James Sherk, concluded that at the present jobs growth rate it could take another five years for a full jobs recovery to occur from the Great Recession. That would place the recovery after the next presidential election in 2016, and nearly ten years after the start of the recession in December 2007.
Noting that 125,000 new jobs must be created every month just to keep up with population growth, they turned to the “jobs calculator” offered at the website of the Federal Reserve Bank of Atlanta and asked it to determine how long it would take for job growth to return to normal, based on the average job growth over the past three months (170,000). The answer: the summer of 2017.
This assumption that future job growth would be maintained at that rate is laden with so many difficulties and subject to so many unknowns as to call the entire exercise into question. This is called “straight line thinking in a curvilinear world,” or, put another way, this assumes that the future will look like the past. It probably won’t.
For instance, there is the “fiscal cliff” and the great uncertainty about how the lame duck congress will deal with it, if they deal with it at all. Great speculation abounds about various scenarios, but each concludes that such a monthly job growth assumption could be wildly off the mark, resulting in much lower job growth in the future.
Secondly, now that the president is free to work his will without having to face an unhappy electorate, the expected tsunami of regulations pouring out of Washington will certainly hamper job creators in the years ahead.
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