June 6, 2014

Chart of the Week: How U.S. regained all its lost jobs, but still fell behind

 

jobs_gapAccording to today’s employment report, the U.S. finally — after six and a half years — has more jobs than it did before the housing crash and subsequent global financial crisis cratered the economy. After adjusting for seasonal variation, there were 138,463,000 nonfarm payroll jobs in May — surpassing the pre-recession peak of 138,365,000 in January 2008.

But while the country may have climbed out of the deepest jobs hole since the Depression, that hardly means everything is peachy. There are about 15 million more working-age people now than there were in January 2008, but essentially the same number of jobs. Only 58.9% of the adult population is employed, four percentage points below the level in January 2008. 

As the above chart from the Economic Policy Institute (prepared before today’s jobs report) shows, the economy is still some 7 million jobs short of what it would need for the employment-to-population ratio to reach its pre-recession level. EPI economist Heidi Shierholz commented, “We are far, far from healthy labor market conditions.”

The long, grueling recession likely did permanent damage to the U.S. economy, according to a new paper by Hoover Institution scholar Robert Hall. Hall estimates that last year, total economic output was 13% below its long-term trend, mainly due to four factors: continuing unemployment and under-employment, underinvestment in businesses’ capital stock, lower labor-force participation, and reduced overall productivity. While the first two factors should eventually return to normal, Hall concludes, he’s pessimistic about the latter two.

Category: Chart of the Week

Topics: Economic Recession, National Economy

  1. Photo of Drew DeSilver

    is a Senior Writer at the Pew Research Center.

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2 Comments

  1. Doug Pearson7 months ago

    Shierholz’s point, “We are far, far from healthy labor market conditions,” is valid but there are nuances you have not discussed:

    The total population is beginning to show signs of leveling off.

    The percentage of total population that is working has been declining in recent years, as seen in this FRED (Federal Reserve Economic Data) graphic:
    research.stlouisfed.org/fred2/gr…

    The percentage of women who are wage-earners grew steadily from 1965 (32%) to 1990 (47%), but has remained between 47% and 50% since then.

    Reply
  2. Dave Holden7 months ago

    See figure 1: Natives accounted for two-thirds of the increase in the working-age popula- tion (16 to 65), but all of the employment gains went to immigrants, 2000-2013.

    cis.org/sites/cis.org/files/immi…

    Reply