This would not have occurred if we had a shortage of demand. The only thing that hasn't recovered is employment - firms are meeting the same demand with fewer workers. This is why profits are up:
This also suggests that it will be very difficult to solve the unemployment problem - it appears that most of the laid off workers were completely dispensable (perhaps with some changes to business processes). If they provided little of value to their former employers, it will be hard to convince a new employer that they will provide value for him/her.
To clarify, I meant labour market demand. Either way, it appears that the employment problem isn't simply skill mismatch or geographical immobility; firms have effectively substituted for [US-based] labour and overall demand needs to continue to pick up to restore the health of the labour market.
If growth of the economy overall is needed to solve problems of structural adjustment reducing labour market demand levels, I'm not sure that churning out more mediocre database programmers through subsidised courses can be presented as an optimal solution. As I said earlier, I'm not remotely opposed to govt-funded training when advocated in less crass terms than Greenspun's, but if implemented badly the end results can make employees even more dispensable by commoditising skillsets that were previously an edge for those investing in their own education and dissuading newly-profitable employers from investing in training in areas where demand is picking up.
There is no longer a shortage of demand. Sales, consumption and production have more or less recovered to their pre-recession levels.
http://research.stlouisfed.org/fred2/series/INDPRO
http://research.stlouisfed.org/fred2/series/PCE
http://research.stlouisfed.org/fred2/series/RSAFS
http://research.stlouisfed.org/fred2/series/GDP
This would not have occurred if we had a shortage of demand. The only thing that hasn't recovered is employment - firms are meeting the same demand with fewer workers. This is why profits are up:
http://research.stlouisfed.org/fred2/series/CP
This also suggests that it will be very difficult to solve the unemployment problem - it appears that most of the laid off workers were completely dispensable (perhaps with some changes to business processes). If they provided little of value to their former employers, it will be hard to convince a new employer that they will provide value for him/her.