Today, something highly unusual is happening. Economic output fell in the first quarter and signs suggest it did so again in the second. Yet the job market showed little sign of faltering during the first half of the year. The jobless rate fell from 4% last December to 3.6% in May.
It is the latest strange twist in the odd trajectory of the pandemic economy, and a riddle for those contemplating a recession. If the U.S. is in or near one, it doesn’t yet look like any other on record.
Analysts sometimes talked about “jobless recoveries” after past recessions, in which economic output rose but employers kept shedding workers. The first half of 2022 was the mirror image—a “jobful” downturn, in which output fell and companies kept hiring. Whether it will spiral into a fuller and deeper recession isn’t known, though a growing number of economists believe it will…
At the end of June, 1.3 million Americans were collecting federal unemployment checks, substantially fewer than the 1.7 million people collecting them on average each week during the three years before the pandemic, when the economy was considered to be exceptionally strong. The number of people receiving such benefits topped 6.5 million during the 2007-09 recession and exceeded 3 million during the two earlier downturns.