All the jobs are back … please, hold your applause.

According to the Feds, the economy added 217,000 jobs in May … that’s good.

Big deal made of the fact that the economy has regained all of the jobs lost in the finance-induced recession.


But, save the high fives …that’s only part of the story.

The rest of the story doesn’t look nearly as rosy.



First, compared to other recessions, it has taken the economy a lot longer to regain the number jobs.

Sure, the recession was deeper, but the recovery was still asymmetrical … i.e. it dragged on a lot longer than the typical bounceback pattern.

Source: AEI


The slow recovery has left almost 10 million people still unemployed … that’s 3 million higher than pre-recession levels.



And, the number of unemployed is understated (by historical standards) since so many people have dropped out of the labor force … i.e. have quit looking for work.

Some are simply discouraged and some, I guess, have simply been “liberated from the burden of work”




Combining the factors, the employment to population ratio continues to lumber along roughly 4 percentage points lower than pre-recession levels.

Translation: we’ve settled in at a new normal rate of workers supporting the full population … and the jobs being added are just keeping up with population growth.



While the number of jobs has built back up to pre-recession levels, the average number of hours worked is still down by about 1% … that equates to about 1 million “equivalent time” jobs.



The decline in hours worked is driven by the mix shift from full-time to part-time jobs.

While total jobs are back at pre-recession levels, the number of full-time jobs is till almost 3 million short.

Said differently, about 3 million full-time jobs have been replaced by part-time jobs.

Source: 528


The average hourly wage rates bumping along at historically low levels … in part due to the mix shift to lower paying part-time jobs … and in part due to industry mix shifts, e.g. more jobs in low paying industries like hospitality.



Inflation-adjusted “real wages” have been flat-lined for the past 5 years.

Source: 528


Bottom line: Good that the economy has bottomed out and has some modest traction … but end zone dances are way premature.


Follow on Twitter @KenHoma            >> Latest Posts


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: