- Strong July job gains further separate the COVID recovery from the Great Recession’s.
- The current recovery is recouping lost jobs nearly three times faster than the late 2000s did.
- Unemployment is falling now, but it kept rising for six months at the same point of the Great Recession.
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While 2008 and 2020 are both known for economic catastrophe, the July jobs report confirms their recoveries are wholly different.
For the second month in a row, the US added nearly 1 million jobs and beat economists’ expectations for hiring. Government data published Friday showed the unemployment rate sliding to 5.4%, wages climbing strongly, and employment broadening across racial lines. By practically every measure, the report showed the labor market recovering dramatically. It’s a far cry from April’s dismal jobs report, which came in at 269,000 jobs, when nearly 1 million was expected, but better late than never.
The path to full employment also stands in stark contrast to the recovery from the Great Recession. Payrolls still sit 3.7% below their pre-crisis peak 17 months into the pandemic, according to Insider calculations. It took 48 months for the country to reach that same milestone after the financial crisis.
Where the US is now squarely on the road to a complete recovery, the country was still mired in economic hurt at the same point of the Great Recession. Seventeen months into the 2008 downturn, unemployment kept climbing for another six months before the labor market began to heal.
The trend of job creation is even more encouraging. Even if job growth slows slightly from the July pace, the US is still on track to recoup its lost payrolls by the end of 2022. That would be five times faster than it took to recover every job lost during the Great Recession, Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, wrote in a tweet.
Jason Furman, who chaired President Barack Obama’s Council of Economic Advisors during the Great Recession, wrote on Twitter, “I have yet to find a blemish in this jobs report. I’ve never before seen such a wonderful set of economic data.”