There is no life in America’s market. The recession officially ended in June 2009, but the Great Jobs Recession continues apace. Since the government began to measure the business cycle, no recession has been marked by such high levels of unemployment and underemployment, or followed by such anaemic job growth. More jobs were lost in the recession of 2007 to 2009 than in the previous four recessions combined, and this time it is an agonisingly slow business to replace them. Of the 8.8m jobs lost during the downturn, roughly 900,000 were recovered in 2010, and many of these were temporary census positions. The especially sharp drop in full-time jobs, the duration of long-term unemployment, and the declining average work week are all contributing to concern over the prospects of the US economy.

Many are puzzled why the job market is so bad at a time when corporate profits are so good. The answer is that they are related. As long as top-line revenue growth was strong, companies were not focused on cutting costs to maintain or improve profitability. These days lack of revenue growth has forced companies to cut costs, especially on labour. Increased productivity and higher margins are now common across American business. Add to this higher growth overseas and share repurchases and the result is higher profits with virtually no hiring. Since last June, employers have added a net of only 284,000 jobs. In fact, total employment as of January 2011 was 550,000 fewer workers than were employed in June 2009. Nothing has appeared on even the distant horizon that would challenge the judgment of Ben Bernanke, chairman of the Federal Reserve, that the job market is the chief source of national concern.

The recent headline news revealed that we gained a dismal 36,000 jobs in January (compared to the consensus forecast of 148,000 new jobs). The decline in the unemployment rate to 9 per cent is an illusory portrait because half a million discouraged workers stopped looking for jobs. But the people who have dropped out of the job market have not dropped out of life. They represent a major loss of spending power in the economy.