There's widespread discussion of an improving US economy, that we've turned the corner. It is true that we're no longer seeing as high a level of job losses, and "headline" unemployment is slightly lower. There's even discussion of renewed job creation, though the data are less than compelling.
The unfortunate reality is that we've not yet begun to catch up with where we ought to be. That's because in the doldrums (and worse) of the past 4-plus years our population has grown: to tread water we need jobs to increase at 1.1% per annum. To move towards the (old?) normal job growth has to be much stronger. For example, to return to trend by the end of 2015 would require job creation averaging 3% per annum over the 5 years. That would be an extraordinary accomplishment.
It's looking more and more likely that recovery will require a full decade. And that's despite monetary policy more aggressive than Japan's. If states, localities and even the Federal government do as much to cut employment as the "right" proposes in their concern over deficits, we'll end up chasing our own tail, producing slower growth and the need for yet more cuts. It's now almost inevitable that we'll manage to underperform Japan. That would also be an extraordinary accomplishment.
