All hail the arrival of zero! It’s been a long time coming—nearly two years. But better late than never.
Technically, nonfarm payrolls slipped last month by 11,000, the Labor Department reports. But in a labor force of nearly 131 million, that’s effectively no change if we consider the potential for statistical noise and the prospects for an upward revision down the line.

Today’s news is, of course, encouraging. Indeed, the November employment report is the most optimistic since the recession began in terms of trend and magnitude. The return to zero, or thereabouts, isn’t a complete surprise, however. As we noted yesterday, the continued drop in new filings for unemployment benefits suggests that the wave of layoffs that has burdened the economy is rapidly fading. That doesn’t necessarily mean that a new era of robust job growth is set to begin. But at least half of the problem seems to be history, or so one might assume.

The recession, for all intents and purposes, is over. That statement doesn’t minimize the massive job loss that’s taken place over the past two years, but it does reflect the mounting evidence that broad economic contraction is probably behind us. Indeed, reach this point in the business cycle was always the first priority: Stop the bleeding. That included keeping deflation at bay. Both objectives have been accomplished, although it took longer than usual.
But let’s not forget that failure on those twin fronts—ending the broad economic retreat and keeping prices stable—surely would have created another Great Depression instead of the Great Recession. On that point, we can be grateful, and much of the congratulations go to the Fed and its counterparts around the world. Aggressive monetary policy has intervened and, for the moment at least, to our advantage.
But having slayed the ghost of the 1930s, we must now confront the bigger challenge: growing the economy on a sustainable level that lifts the labor market. The hard work is about to begin. As difficult as it’s been to return the economy to a state of treading water, that will pale next to the business of promoting non-inflationary growth on a meaningful scale in the years ahead. Simply expanding the labor market to its pre-recession level—roughly 7 million jobs more than we currently have—will require an unusually lengthy and potent expansion. As if that wasn’t enough, there’s the threat of high inflation, rising interest rates and a hefty debt load on governments and consumers lurking. This isn’t going to be easy.
And just to keep our perspective firmly grounded in reality, let’s not forget that even today’s relatively rosy employment report is still technically showing job destruction. If it wasn’t for the buoyant services sector, the slight 11,000 retreat in nonfarm payrolls would be worse by nearly 60,000.
But for the moment, the trend seems to be our friend. The question is whether the trend has a head of steam?