Rethinking the 'Strong Jobs Recovery' Scenario

After all this data-crunching, one query remains: How does this jobs-recovery era compare to prior ones?

The answer, it turns out, is not particularly well. In fact, this is the eighth-worst jobs recovery of the prior 10 recessions, according to The New York Times.

What made this cycle somewhat unique was that the job count fell for another year and a half after the recession ended.

The reason for this is quite simple: Most economists have been looking at the post-recession period incorrectly. Instead of viewing this as a post-bubble economy, with the 2000 crash a rare event, they are looking at it as if it's just another postwar recession-recovery cycle. That misses the bigger issues.

By nearly any honest measure, this has been a lackluster jobs recovery. That is not widely believed among the investing population -- though consumer sentiment shows plenty of hesitancy.

Base of the Bear

This is another in our occasional series of data analyses, looking beneath the headlines at the actual numbers to discern what's truly going on in the economy (see prior commentary on home sales data; Black Friday, and inflation).

This variant perception -- that the macro environment is far worse than most people believe -- forms the basis of my bearish expectations for 2006, which I'll explore in more detail in a forthcoming column.