Recessions are measured in multiple ways -- gross domestic product, income, jobs, industrial output, along with wholesale and retail sales.
But it’s the employment component that determines how a recession really feels, and to a large extent, how consumers react.
This Friday brings January jobs data for both the United States and Canada. Both countries are still struggling to return to pre-recession health. For many people, hard times continue.
Revisions this past Friday by Statistics Canada show that the country has not yet recovered all the jobs lost in the downturn. StatsCan now says the economy lost 428,000 jobs between October 2008, and July 2009, but has regained only 398,000 since. That leaves the country 30,000 shy of where it was -- and even farther away from where it needs to be just to keep pace with the growing population. (StatsCan has previously estimated that the economy had lost 417,000 jobs and recovered 463,000.)
The recovery has been unequal. Economist Arthur Donner says high-wage, goods-producing industries have only recovered 41% of the jobs they lost. The biggest generators of new jobs in Canada since July 2009, are government departments, including social services, health and education.
The United States remains in a much larger jobs hole. There are still has 7.2 million fewer jobs than before the recession. The U.S. jobless rate peaked at 10.1% in October, 2009. But it remains stubbornly high, at 9.4% in December, 2010.
The Washington-based Economic Policy Institute estimates that 4.4 million workers have gone AWOL, disappearing entirely from the labour force. The labour force participation rate has continued to fall -- to 64.3 per cent in December -- even though the recession is officially over. If only half of the missing workers returned to the labour force, the jobless rate would be 10.7%, the institute said.
Many economists prefer to look at underemployment as a truer measure of economic conditions. Instead of simply tracking people actively looking for work, it also includes those who have given up searching and those forced unwillingly into part-time work rather than full-time employment. That calculation puts the underemployment rates at 16.7% in December.
In raw numbers, that leaves 26.1 million Americans either unemployed or underemployed.
But the U.S. appears to have more momentum. The consensus forecast among economists is for the U.S. economy to generate a solid 125,000 jobs, compared to 103,000 in December. A significant change in the jobless rate is unlikely.
Watch for revisions to previous months; large revisions since the recession have made monthly numbers far more unreliable than normal.
Job creation is Canada was slowing in the second half of 2010. Economist Adam Goldin of Moody’s Economy.com warned that December’s job gain of 22,000 in Canada might be a bit of an outlier. There’s been "a gradual return to sustainable employment growth." But January and the rest of the year look “unclear," he said.
Still, the consensus among economists surveyed by Bloomberg is for job gains of roughly 22,000 in January and for the unemployment rate to hold steady at 7.6%.
