The Bureau of Labor Statistics (BLS) predicted this month that the slow economic job growth seen throughout the recovery will continue over the next several years at an even slower rate than originally thought.
The U.S. economy has steadily improved in the six years since the Great Recession. Those improvements, however, have been extremely slow and plagued with problems. A BLS report analyzing Gross Domestic Product (GDP) and employment from now to 2024 projects the lackluster recovery will continue at an even more bleak rate than originally expected.
“From 2010 to 2014, GDP growth averaged just 2.1 percent annually,” the BLS report stated. “GDP will grow at 2.2 percent annually over the coming decade, maintaining its average growth rate experienced during the 2010–14 recovery.”
GDP is one way of measuring economic growth commonly used by economists and policymakers. It looks at the value of goods and services produced over a particular amount of time. The Great Recession hit the global economy hard and economic growth and employment suffered greatly. Brought on by the 2007 financial crisis, it ended in 2009 leaving ruin in its wake.
The devastating economic crisis was followed by an unusually slow recovery adding to an already struggling consumer and businesses climate. In comparison to the projected growth rate, 10-year averages from the 1960s to the financial crisis experienced an annual growth rate of three percent or higher.The report points to a decline in the labor participation rate as a primary factor for the slow recovery. The measure tracks those employed or seeking employment. It allows economists and policymakers to understand who is not trying to find work, which unemployment rates alone don’t reveal.
A decline in the labor participation rate is bad news for the economy because it means less workers or potential workers. Even as the economy grows, there are less workers for new jobs. The report also points to an aging population as another factor to why the recovery has been and will continue to be so slow.
“Lower labor force participation will constrain growth from the supply side,” the report concluded. “Making output and employment growth slower than previously projected.”
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