Prior to this recession, the last three employment rebound cycles - 2001,1990, 1981 - were all the longest in duration since WW II.

Brutal as they were, these prolonged rebounds all ran concurrently with a massive expansion in consumer debt. So they had a lot going for them in terms of an “assist” from the biggest gorilla in the room - the US shopper. Ominously, these last three were also notable for what we now call “jobless recoveries”.

Now to the present situation.

In this current recession the consumer is deleveraging in a way that she did never did in the prior three. In the aftermath of those prior recessions, the plucky consumer air-lifted us out of the swamp by increasing her personal debt. In this one, she has no home equity loan to draw upon, is afraid for her job, and is prudently cutting down on all luxuries.

And her sister is on long term unemployment for the first time in her life and she is flat broke.

So the question we must now ask ourselves is: if increased consumer spending is not coming to our rescue this time, and, if that in itself, even if it were it to happen, would still not create jobs as evidenced by the last three post recession clawbacks, then what of our prospects to see improving employment any time soon?

When will we hear the stone hit the bottom of the well?

- theblindtibetan

Related Posts:

• You can bet that Jan. unemployment#s will be revised downward like Dec #s (revised downwards to 150k loss from 85k).
• Here’s a few words from Wikipedia about recessions:
• Here is another thing about bank closures:
• This recession is far from over! We’re just lucky that it did not turn in to a full depression.
• GDP is not a good indicator of economic health; We are heading to a CRASH.

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