February 9, 2022

Revised data show steady improvement but an economy still down 3 million jobs from before the pandemic. Similarly, Gross Domestic Product for the fourth quarter was 3 percent higher than pre-covid, but a big chunk of that was due to higher inventories, not actual consumption.

We seem to be looking at an economy that is different than before, but in ways we don’t quite understand. Are those 3 million people actually working but in ways we don’t measure? Are business inventories higher simply because Amazon operates more warehouses? In other words, are these developments now normal features of the economy going forward?

The job data certainly suggest that a lot of markets have recovered as much as they’re going to, and big parts of the economy like healthcare and government haven’t added jobs at all in the last six months. Many of us believe that the pandemic will rapidly recede this year, with schools and restaurants getting back to normal, but we thought that last year too. We better consider the alternative, that large-scale circulation of covid will continue to interfere with economic and social interactions.

In this situation it makes sense to start measuring further economic progress from here on out rather than compared to before the pandemic. So we’ll report job growth every month compared to September 2021.

 Overall, then, jobs in January were up 1.6 percent, including 1.3 percent in construction, 1.2 percent in manufacture, 1.1 percent in retail, 1 percent in finance, 2.4 percent in business services, 0.5 percent in healthcare, and zero in government. Jobs at restaurants were up almost 4 percent, which still leaves them down 8 percent since the pandemic started.

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