Wow. The Bureau of Labor Statistics has come around to my view of the economic recovery, in substance if not in rhetoric. The precis from “The U.S. economy to 2022: settling into a new normal”:
No one could have predicted the length of time that the economy has required to recover. A variety of economic headwinds have battered the recovery, causing output growth to be somewhat slower than was expected in prior projections. Over the coming decade, growth is expected to be gradual but persistent, bringing the unemployment rate down and returning the macroeconomy to a more stable position.
“New normal” is wrong, of course, since incremental growth in the labor market is also the historical norm for the U.S. economy. There isn’t any historical precedent to support the abrupt jobs growth that the BLS and others were expecting five years ago. “No one could have predicted” is correct only if you discount the chorus of economists who were pointing at the historical record. But there is no need to quibble. The aggregate models at the BLS now agree with the historical view that it will take years for the U.S. labor market to return to something approximating a nice balance. It may happen around 2022, absent any intervening calamity, the new BLS forecast suggests.