April 4, 2014

Chart of the week: Still deep in the jobs hole

Chart showing how long it will take to return to pre-recession employment levels at different rates of job growth

Today’s employment report indicated that the U.S. economy added 192,000 nonfarm payroll jobs in March, slightly below the revised gain for February and a bit below Wall Street expectations. That essentially continues the pattern in place since late 2010: steady, decent job growth but only enough to chip away at the yawning jobs hole opened by the Great Recession. Even now, there are still 437,000 fewer payroll jobs than there were in January 2008.

But that metric understates the jobs gap, as illustrated in the above chart from the Hamilton Project, an economic policy initiative of the Brookings Institution. (Clicking the chart will take you to an interactive graphic.) Because more people are entering the labor force each month, merely replacing all the jobs lost during the recession won’t bring employment back to its pre-crisis level.

Under the most optimistic scenario — the economy adds 472,000 jobs a month, the highest single-month rate in the 2000s — it would still take until October 2015 for employment to regain its pre-recession level. If the economy replicates its performance in 2005 (the best year since 2000) and adds about 208,000 jobs a month, it would take until September 2018. And if the economy continues to add jobs at the rate it has since late 2010 — an average of 182,000 a month — the employment gap won’t be closed till August 2019.

Category: Chart of the Week

Topics: National Economy, Work and Employment

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.

3 Comments

  1. Jodi Summers2 years ago

    Job creation (or lack thereof) and a growing middle class leads a bigger issue. A recent census report notes that most people who are considered middle class, don’t actually earn enough to be middle class (owning a home, sending your kids to college, having health insurance).

    The United States was built on the middle class. How do we reverse the trend?

  2. Doug Pearson2 years ago

    The numbers are actual counts of people, not ratios, but your questions are good ones. The “Gap” is the difference between some unspecified number of people that grows with overall population and some other unspecified number of people employed, and it is normalized to 0 at the beginning of the Great Recession.

    There is a related chart that leaves out the growth in working age people. It shows we are about to reach the same number of employed people as at the beginning of the Great Recession. This chart shows that’s not good enough to match the growth in working age people.

    The widely cited “unemployment” index gives a poor look at employment because it does not consider people who are out of work but not actively seeking work. Nevertheless, all three views tell us that businesses are not hiring enough people to solve the unemployment problem.

  3. Sean Boyle2 years ago

    What data is this? Is it based on the employment to population ratio? U6 underemployment? It’s not clear from either this page or the source link from the Hamilton Project.