Getting Back to Even

Source: Bureau of Labor Statistics.

For the 38th consecutive month, the country added jobs: 203,000 nonfarm payroll jobs in November, to be more precise.

But employment still has a way to go before returning to its pre-recession level.

The chart above shows economic job changes in this last recession and ongoing recovery compared with other recent ones; the red line represents the current cycle. Since the downturn began in December 2007, the economy has had a net decline of about 1 percent in its nonfarm payroll jobs. And that does not account for the fact that the working-age population has continued to grow, meaning that if the economy were healthy there should be more jobs today than there were before the recession.

The drop in the unemployment rate in the current recovery, to 7 percent of the labor force, has been achieved in part by a decline in labor force participation. To get to a jobless rate of 6 percent while returning to the labor force participation rate that prevailed at the recession’s end in June 2009 would require nearly seven more years of monthly job growth at November’s pace. (There is wide disagreement about whether the labor force participation rate will ever rise to what it was a few years ago, though, particularly given the aging of the baby boomers and concerns about fraying skills; you can run your own job creation projections under different labor market assumptions using this nifty calculator.)

There are now 10.9 million people looking for work who cannot find it. The broader tally of those who are underemployed â€" that is, adding in those workers who are part-time but want to be employed full time, and workers who want to work but are not looking â€" brings the total up to 20.7 million.

As noted here each month, those job numbers are discouraging, but job markets in the decade after a financial crisis are always terrible. In fact, layoffs were far worse and lasted much longer in the aftermath of the financial crises that struck, for example, Finland and Sweden in 1991 and Spain in 1977, not to mention the United States during the Great Depression.