American employers added 585,000 jobs in November and December of 2014, according to encouraging jobs reports from the Bureau of Labor Statistics. The growth occurred across the board: 139,000 new jobs in professional and business services; 63,400 in retail; 46,000 in manufacturing; and 71,000 in food service. Even construction, which suffered worst during the recession, added 68,000 jobs, driven by new housing activity.
Though steady, the recovery remains slow. It took until March 2014 for the economy to replace the 8.8 million jobs that it lost in 2008 and 2009. A healthy economy should add 200,000 new jobs every month, even when it’s not recovering from a recession. By that standard, America should have 133 million people working in the private sector right now, not 118.4 million. So many people have grown discouraged that only 62.7 percent of adults are currently either employed or looking for a job, down from 66 percent in early 2008. And after four and a half years of growth, the economy could be ready for a cyclical recession.
The U.S. economy crashed in 2008 because Americans had taken on so much debt that they couldn’t afford to borrow any more. Mortgage debt more than doubled between 2000 and 2007, from $4.8 to $10.6 trillion. Credit-card, auto-loan, and student debt rose by 53 percent. (Inflation rose 20 percent in the same period.) The housing bubble had lulled Americans into thinking that such unsustainable debt was okay. But when the housing market leveled off, starting in 2006, borrowing slowed. In 2008, it stopped.
