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Commentary: Why the U.S. Recovery Is Lagging

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Why the U.S. Recovery Is Lagging – Sebastian Mallaby, Director of the Maurice R. Greenberg Center for Geoeconomic Studies and Paul A. Volcker Senior Fellow for International Economics, June 3, 2011

  • “CFR’s [Council on Foreign Relations] quarterly chartbook, which sets the U.S. recovery in historical perspective, shows that the economy has expanded by a total of 4.9 percent since the last recession officially ended in June 2009. By comparison, the average postwar recovery had generated an expansion of 9.4 percent by this stage in the cycle. Even taking into account the job creation of the past quarter, the total number of nonfarm jobs in the economy is only slightly above the number that existed before the recovery started. By contrast, the average postwar recovery had created some 2 million jobs by this stage. Why has the recovery been so anemic? During the recession, real house prices declined more sharply than in any twentieth century contraction (see the historical comparison in a second chartbook). But during the current recovery, house prices have failed to come back up; indeed, they have fallen a further 7.1 percent. This performance is worse than anything the United States has ever experienced in the post-war era.”
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