The conventional wisdom is that relatively few of the eight million plus U.S. jobs destroyed in the recession have returned, condemning the world's largest economy to a plodding recovery.
That, of course, is why there's such doubt about Canada's own recovery. We want the United States to heal so we can sell Americans more of our cars, oil, lumber and the like.
What if the premise is wrong? And the U.S. is in much better shape than anyone imagined?
There was some evidence of a healthier U.S. labour market in March. New figures released Friday show payrolls expanded by 216,000 and the jobless rate fell to 8.8 per cent from 8.9 per cent in February.
But the overwhelming perception remains that the U.S. is stuck in a deep economic hole - a crater of lost jobs and destroyed wealth that will take years to come back.
The main evidence to support this grim outlook is some very simple math. Employment fell by about 8.8 million in the recession. Through March, just 1.5 million jobs had been added since. That leaves roughly 7.3 million "lost" jobs.
The problem with these numbers is that they're based on oft-cited seasonally adjusted employment, favoured by Wall Street and Bay Street economists. They're statistically manipulated by the U.S. Bureau of Labor Statistics (BLS) to erase any seasonal variations, such as holiday retail activity or seasonal weather. In other words, they're a mathematical construct to enable quick and fair comparisons from one month to another.
Vancouver economist Doug Smyth loathes seasonally adjusted numbers, which he insists have badly underestimated the true pace of jobs growth during this recovery.
He favours the raw, unadjusted figures - real people, earning real wages, in real time. These workers are the U.S. economy, Mr. Smyth argues.
Just look at March. The seasonally adjusted numbers show a gain of 216,000 jobs from February. The unadjusted numbers (what employers actually report to the government) shot ahead by 925,000, or more than four times faster. Nearly a million more people were collecting a paycheque in March than in February.
It isn't just March. The unadjusted numbers have been showing a much brighter recovery for more than a year now, and the gains have been growing steadily.
Total U.S. non-farm employment had recovered 4.3 million jobs, from the January, 2010, low for the decade through last November (or before employment takes a brief winter breather), according to Mr. Smyth. Put another way: Roughly half the jobs that vanished between January, 2008, and January, 2010, are already back, versus the much smaller 15-per-cent jobs recovery cited by most economists.
Mr. Smyth also compensates for what he considers a timing flaw in how the BLS counts payrolls. (The agency collects its data early each month, rather than looking at a month as a whole, resulting in a chronic undercounting, particularly in manufacturing.) "The BLS is built for speed, not accuracy," he points out.
But it's not just a statistical game Mr. Smyth is playing.
The bottom line is that the underpinnings of the U.S. recovery may be much stronger than most people believe - economists, investors and many businesses.
"As the employment tide rises, all the other boats rise with it," Mr. Smyth concludes in a major new report that puts a much more positive spin on the U.S. jobs recovery. "Mortgage foreclosures disappear, household formations increase, and consumers begin to spend freely. This is exactly what is happening in the U.S. economy now."
The better jobs gains explain last year's surge in U.S. consumption, including a burst of car buying.
The good news is that the pace of this employment growth (measured by year-over-year unadjusted jobs gains) is gaining strength every month. Jobs are coming back much faster than most analysts assume, and that means consumers have more cash to spend.
And because consumer spending makes up 70 per cent of the economy, 2011 could prove to be a breakout year in the U.S. recovery. The consensus among economists is for growth of about 3 per cent this year, compared to 2.4 per cent last year.
Based partly on what's expected to happen in the U.S., the recent Harper budget forecast growth in Canada of 2.9 per cent this year, 2.8 per cent in 2012 and 2.5 per cent in 2013. Nothing special.
Mr. Smyth is considerably more optimistic about the United States, and by extension, Canada. He expects the U.S. economy will grow 3.5 per cent this year.
Three per cent versus 3.5 per cent growth in a $15-trillion (U.S.) economy: That's a large gap compared to the consensus. It affects how many cars Canada produces and how much oil we export.
Maybe the sky isn't falling after all.