The October Jobs Report in Perspective

On Friday morning, the Bureau of Labor Statistics reported that the U.S. private sector added 104,000 jobs in the month of October. Moreover, data from the past several months were revised upwards. Since October, 2010, America has gained more than 1.8 million private jobs. That gain looks less impressive, however, when you consider that the population expanded by about 2.8 million people over the same period. Below the fold are a few charts that help put all of the recent data in perspective. Bottom line: the situation is not improving at a meaningful pace.

How does the current ratio of private employment to the total population compare with post-WWII history?

Despite the gains since the summer, the share of the population employed by the private sector is the same as it was during the painful “jobless recovery” of the early 1990s. Moreover, the pace of growth is achingly slow:

By January, 2020, there will still be 7 million out of work relative to the labor market conditions of May, 2007. In fact, at current growth rates, this unemployment gap will not be closed until sometime in mid-2031—almost a quarter-century after the downturn began:

As bad as these numbers are, they do not distinguish between full-time and part-time work. There are now nearly 9 million Americans working part-time who want full-time jobs. Relative to the number of people in the United States, this number is twice as large as it was in the summer of 2007:

It is narrowly correct that conditions are improving. However, it would be deeply misleading to say so. The depressed level of employment is far more salient than the small positive changes.

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About Matthew C. Klein
I write about the economy and financial markets for Bloomberg View. Before that I wrote for The Economist on a fellowship provided by the Marjorie Deane Financial Journalism Foundation. I have worked at the world's largest hedge fund and read every FOMC transcript since May, 1987.

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