Why It Could Easily Be Another 7 Years Before We're Back To Old Employment Levels

by Gregory White

If many of the experts are wrong, and the U.S. employment recovery isn't about to pick up, then we're in for an extremely long slog to get back to pre-recession levels, according to the San Francisco Fed.

This chart from the San Francisco Fed shows that, yes, if job growth performs at its post-recession peak, we'll be back to 2008's jobs level by 2013.

But, more worrying, it may take until 2018 or later to get back to 2008's jobs level if we grow at an average pace of 82,000 jobs per month.

There are a lot of reasons why job growth may not be at that 239,000 job per-month peak:

• Rising inflation could hit margins at firms, and lead to either more firing or less hiring.
• Weak domestic demand could stop businesses from hiring, as that don't foresee sales being strong.
• Or another cyclical downturn could come in and crush job growth.
• We may never get back to that unemployment number, as the baseline unemployment number in the U.S. may have moved higher.

So there are quite a few reasons to be skeptical about that 2013 date.

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From the San Francisco Fed:

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