The Good News in the Jobs Report — Sort Of

We’ve recovered! The country now has more private sector jobs than it did before the recession, surpassing its previous peak. That was in January 2008, when there were 115,977,000 jobs, according to the Bureau of Labor Statistics’ survey of businesses. Last month, the bureau announced Friday morning, there were 116,087,000. High fives all around.

Actually, no. Many of the comparisons of the pre- and post-recession economies leave out one significant detail: we’re not just trying to get back to where we were before the bottom dropped out. We’re trying to get back to where we would have been. Keep in mind that we have 15 million more people now than we did then, an increase of 4.6 percent.

Back then, the unemployment rate was 5 percent â€" now it is 6.7 percent. By the end of 2012, the Chicago Federal Reserve estimated, the country’s total payroll was about 6 million jobs below what it should have been. “Closing this gap by 2016, for instance, would require payroll employment growth of about 195,000 per month on average over the next four years,” the report said. So far, the average since the end of 2012 has been 194,000.

The good news in the report, by Daniel Aaronson and Scott Brave â€" sort of â€" is that fewer jobs will be required in the future because fewer people are participating in the labor force (either working or actively looking for work). They said that the economy would need only 80,000 jobs a month â€" far less than the 150,000 to 200,000 needed in the 1980s and 1990s, when millions of women were entering the labor force. In a couple of years, the number of jobs needed to stay on trend would fall to 35,000. That augurs a future of low growth. Another estimate, based on Congressional Budget Office projections, says 90,000 jobs a month are needed.

But, they acknowledge, that is based on a number of assumptions about which there is high uncertainty, such as the extent to which the decline in participation is driven by demographic changes like aging Baby Boomers, as opposed to discouraged people who would like to have jobs dropping out. Right now, there are 6.1 million people who are not in the labor force but “want a job now,” lower than last year’s average of 6.4 million. As the job market improves, those people tend to re-enter the labor force.