Optimistic Sign #11: Jobless Recovery


In the past few months, the Conventional Economic Wisdom (CEW) has swung from a recession of indefinite duration (but always lasting at least 18 months longer) to a jobless recovery. This can only mean one thing: job growth in the United States is about to explode.

This is not based on any particular insight I have, just the observation that job growth is a lagging economic indicator, and the CEW is always looking in the rear-view mirror. The CEW saw continued growth in the first half of 2008 after the recession had already started, hard times as far as the eye could see in the first half of 2009 as the economy bottomed out, and now that growth is returning the CEW insists that it isn't really at least not for most people.

So I will once again stake out my contrarian position and claim that the pessimistic CEW is a leading indicator for imminent job growth.

APPENDIX: My contrarianism has actually served me reasonably well. Looking through my blog archives, I find that at the end of 2005 I wrote that there would probably be a recession starting by the end of 2007 (true, but barely). At the beginning of 2008 I wrote that we were already in a recession (before the CEW acknowledged the fact) but that we were close to the bottom (sadly, too optimistic). Then at the beginning of 2009, as the economy was bottoming but the CEW saw nothing but pessimism, I started looking for signs of hope. This time around I could be completely off-base or way too early, but by golly I'm going to stick to my contrarian optimism until I'm right.