In the next few months, the labor market will pass a milestone in its recovery from the Great Recession: Total payroll employment (private plus government) will finally top its pre-recession level . But before breaking out the champagne, let’s remember that the previous peak was more than six years ago in December 2007; with population growth, the number of people who want to work is much higher now.
In short, we still have a serious employment problem. Fortunately, Federal Reserve Chair Janet Yellen seems to agree.
Perhaps the best illustration of the problem is the chart below showing that the share of people aged 16 and older with a job, which in the recession plunged to levels last seen in the 1980s, has barely budged since. But hasn’t unemployment fallen from 10 percent to under 7 percent? Yes, but at 6.7 percent in March, it’s still at least a full percentage point higher than where most Federal Reserve decision-makers or the Congressional Budget Office think it would be if the economy were operating on all cylinders.
Moreover, the unemployment rate does not count people who want to work but think jobs remain too hard to find and therefore are waiting to look until the chances of finding work improve. They are deemed “out of the labor force” rather than “unemployed” because they are not actively looking.
Chosen excerpts by Job Market Monitor. Read the whole story at Lack of Jobs Is Still a Very Big Problem – US News.
- Returning to Full Employment in US – A CRS Report
- How to get to the 6.5% unemployment rate target: roughly 270,000 jobs each month
- Yellen – Job gap means rates stay low
- Monetary Policy in US – Yellen: The Fed is determined to improve employment situation
- The Skills Gap in US – Mismatch across industries and occupations explains at most one-third of the total observed increase in the unemployment rate
- US / The Jobs Gap: Unemployed Workers Still Far Outnumber Job Openings in Every Major Sector