posted on November 9, 2005 10:27:09 AM newFour years of economic expansion
TODAY'S
WA Times
EDITORIAL November 9, 2005
November marks the fourth anniversary of the current economic expansion. "The most recent [business-cycle] trough occurred in November 2001, inaugurating an expansion," concluded the National Bureau of Economic Research (NBER) in 2003.
A private research organization, NBER is universally recognized as the official arbiter of peaks and troughs for the U.S. business cycle.
This timely period in the cycle is an appropriate moment to review how the ongoing expansion has unfolded since the 2001 recession officially ended four years ago this month and how it compares to other expansions over the past three decades when they turned four years old.
Admittedly, the current expansion took some time to take hold.
But once it finally gained strength during the second quarter of 2003, it established itself as arguably the most steady, non-volatile expansion in 60 years.
After the Commerce Department recently reported that gross domestic product had increased at an annual rate of 3.8 percent during the third quarter, the Wall Street Journal observed that it was the eighth consecutive quarter during which GDP's annualized growth rate hit the range between 3 percent and 4.5 percent. That's the longest such streak since World War II.
Moreover, during the last 30 months (or 10 quarters), when economic growth has averaged more than 4 percent a year, not a single quarter's annualized growth rate has come in below 3.3 percent.
The growth rate in excess of 4 percent over the past 10 quarters contrasts favorably with the 1.8 percent growth rate that prevailed during the first five quarters following the end of the recession.
Repeating the experience following the comparably shallow July 1990-March 1991 recession, the labor market deteriorated markedly during the early stages of the recent economic recovery.
For postwar recessions prior to 1990, employment levels normally reached their troughs at the same time the economy reached its nadir, with the unemployment rate correspondingly hitting its peak within a month or two.
During the last two economic recoveries, however, the economy continued to jettison jobs as the jobless rate ratcheted up.
Even though the 1990-91 recession ended in March 1991 (when the unemployment rate was 6.8 percent), 11 months later the employment level was still 300,000 jobs below its March 1991 level, and the unemployment rate peaked at 7.8 percent in June 1992.
Following the November 2001 trough, employment levels continued to plunge; in August 2003, 21 months after the expansion began, the total of nonfarm payroll jobs was still more than one million below its level at the November 2001 trough.
The unemployment rate, which stood at 5.6 percent in November 2001, reached its cyclical peak of 6.3 percent in June 2003. Since August 2003, however, more than 4.2 million jobs have been generated, reflecting a rate of job creation exceeding 160,000 per month and averaging nearly 2 million per year.
Beyond the lingering effects of the September 11 terrorist attacks and the uncertainty that prevailed before the war with Iraq began, a major reason why employment grew so slowly during the early stages of the current expansion relates to the soaring increase in productivity, or output per hour, in recent years.
During the 15 quarters since the recession ended, nonfarm business productivity has increased by 13.4 percent.
That is significantly higher than the cumulative 15-quarter productivity increases achieved following previous recessions (7.9 percent after the 1990-91 downturn; 11 percent after the 1981-82 recession; and 9.2 percent after the 1973-75 recession).
Measured by the core consumer price index (CPI), which excludes the volatile food and energy sectors, the economy's underlying inflationary pressures appear to be relatively under control at this stage of the expansion. Specifically, the core CPI has increased by less than 2 percent over the past 12 months. At this stage in the expansions that followed the 1973-75, 1981-82 and 1990-91 recessions, however, the 12-month core CPI averaged more than 5 percent.
So, after a slow start, the ongoing economic expansion gained significant momentum, and on its fourth birthday, it remains strong.
With unemployment at 5 percent following the creation of four million jobs during the past 24 months; with the economy having grown by more than 7.5 percent over the past two years; and with annual increases in productivity averaging 3.6 percent during the last four years, the U.S. economy shows little sign of running out of steam as its expansion enters its fifth year.
"Whenever the nation is under attack, from within or without, liberals side with the enemy. This is their essence." --Ann Coulter
And why the American Voters chose to RE-elect President Bush to four more years. YES!!!
posted on November 9, 2005 11:50:16 AM new
LOL bear....that's right.
Besides ms. ignorant doesn't appear to have noticed that no praise NOR mention of this President's name was made in this article.
DUH!!!!
Just a statement of FACTS about how our economy has been doing.
"Whenever the nation is under attack, from within or without, liberals side with the enemy. This is their essence." --Ann Coulter
And why the American Voters chose to RE-elect President Bush to four more years. YES!!!
posted on November 9, 2005 12:19:10 PM new
I look at it like this... After Bush tanked the economy in the toilet, you can only flush it so many times. Just curious, but how many net jobs has Bush created in his 5 years?
posted on November 9, 2005 12:21:37 PM new
I'll even add, that after a decline in Democratic leadership across the country, we just took 2 state Governor seats.
posted on November 9, 2005 12:47:01 PM new
LOL...once again you are wrong in both of your posts, rusty. This President didn't cause jobs to be lost - just like they don't cause jobs to be open - private industry does that...when the economy is good - as it has been for the past 4 years.
Secondly: You DIDN'T GAIN anything....you KEPT them democratic. There is a BIG difference.
"Whenever the nation is under attack, from within or without, liberals side with the enemy. This is their essence." --Ann Coulter
And why the American Voters chose to RE-elect President Bush to four more years. YES!!!
posted on November 9, 2005 02:23:17 PM new
LOL rusty....changing subjects NOW that I've shown you gained NOTHING....just kept what you had.
Arnold is trying to change CA from the liberal leglislator that caused them to be bankrupt. Shame on him for saving the state from that wonderful plight.
But shouldn't suprise anyone CA is one of three MOST LIBERAL states in the whole country. And he's more a moderate....no far rightie there...and to believe otherwise is to be pretending.
More and more are leaving/moving out of CA in DROVES....soon CA will be only extremists and illegals...then you extremists can pay to support the illegals yourself. The Soviet Republic of CA....just like Berkeley has been for all of my generation.
THEN when it goes bankrupt like it faced before the voters threw Gray out on his a$$ you can reap all the 'benefits' YOU and others of your ilk caused to happen.
"Whenever the nation is under attack, from within or without, liberals side with the enemy. This is their essence." --Ann Coulter
And why the American Voters chose to RE-elect President Bush to four more years. YES!!!
posted on November 9, 2005 08:11:52 PM new
Hey LIAR-LINDA_K,
Yesterday the RIGHT went RIGHT in the DRINK.
I was so glad to see Dumbo in Virgina. I knew the Dems would win after he showed up.
Hey, how about the reported TURMOIL between Bush and Cheney.
BOY-O-BOY, LIAR-LINDA_K, your CON-servative form of government is in tough shape. All the CON-servative leaders are fighting among themselves. How this bunch of LIARS,CONS AND CROOKS failed America is SHAMEFUL.
