The sorts of things that typically accompany downturns – such as higher unemployment, increased loan losses for intermediaries, a fall in asset values – did happen to some extent. But because the downturn was brief, these deteriorations were rather mild, which meant that they did not then become part of a major feedback loop back to aggregate demand and output.
That in turn meant that the economy was able to get onto the recovery path more quickly. And so on. As a result, the rate of unemployment, at about 5¼ per cent, is more than 2 percentage points lower than we forecast a year ago. The level of employment is 3½ per cent, or some 350,000 jobs, higher than we expected a year ago.