In 1942, the US economy employed 41.9 million people in firms. At the end of 2022, the number will be 153.8 million, an increase of 267%. Yes, for very 3 jobs in 1942, we have 11 today. Yes again, almost 4 times as many in 2022 versus 1942, despite the 9 million jobs lost in 2008-9 and the 9 million jobs lost in 2020.

The US economy added 12 million jobs between 1942 and 1960, growing from 42 to 54 million positions. Job growth averaged nearly 700,000 per year or 1.4% annually. This was a period of solid growth, despite the 4 recessions.

The period from 1960 through 2001 showed truly remarkable job growth. The economy added 78 million jobs, almost 1.9 million each year or 2.2% annually. STOP and think about this. The Greatest Generation, WW II saving the planet team was just 40 million employees in the US. The immediate post-war boom increased employment to 55 million when the US was the only advanced economy running at full speed. But employment growth accelerated from 1960 to 200. These 4 decades essentially tripled the size of the US economy.

Overall, the last two decades have delivered much slower job growth. Using 2019 as an ending measure, the economy grew by 21 million jobs, from 131 to 152 million since 2001. This is just 1.1 million per year, or a growth rate of 0.8%, far below the 2% plus rate of 1960-2000. Or, the 21 million added jobs is one-half of the jobs in 1942 in the heart of WW II.

But, these two decades experienced the post-millennium downturn, the great recession and the covid pandemic.

The economic recovery from the millennium (Y2K) was quite slow. The recovery from the Great Recession was slow but strong and extended, allowing unemployment rates to eventually reach 3.5%. The recovery from the pandemic situation was much faster than expected, reaching pre-pandemic levels of GDP and employment within 2 years.

The economy has been adding 400,000 jobs each month since the beginning of 2021, almost an amazing 5 million jobs annually.

Million Jobs Added Per Year in Economic Recovery Periods

1948: 2.0

1952: 2.2

1956: 1.8

1959: 2.0

1969: 1.9

1973: 2.4

1980: 2.2

1990: 2.5

2000: 2.7

2007: 1.6

2019: 2.2

The US economy adds 2 million jobs each year when the economy is expanding. The percentage growth rate is slower through time, but the 2 million jobs added each year remains a solid capacity or capability.

Summary

The US economy added 1.4% new jobs annually from 1942-1960. The jobs growth rate averaged a very strong 2.2% from 1960-2021. It then slowed to just 0.8% annually while digesting the Great Recession and the COVID pandemic. The economy added more than 2 million jobs each year after the Great Recession, pushing unemployment to a very low 3.5%. The economy rebounded from the pandemic much faster than the consensus view,

Despite

1. increased international trade
2. greater share of immigrants
3. greater percentage of federal government spending
4. fewer new businesses started
5. declining shares for agriculture, mining and manufacturing
6. greater outsourcing of corporate functions
7. greater share of contracting, non-traditional employment, part-time employment
8. lower rates of geographic mobility
9. lower rates of economic upward mobility
10. greatly increased political polarization at the state and local level
11. decreased labor force participation rates
12. increased opioid and drug damage rates
13. lower community service participation rates
14. lower church attendance and membership rates
15. lower male college attendance and graduation rates

Despite the very many headwinds, the US economy is still able to add 2 million jobs annually during economic recovery periods. It added 9 million positions in 2021 and looks to add almost 5 million positions in 2022 despite the weakening business cycle. Even with a slowing economy, the US is likely to add 2 million new positions in 2023 and 2024.