"A Decent Jobs Number at Last"
After months of jobs news that was good in the sense of “better than the terrible news we’ve been hearing recently,” today’s numbers are actually good in the sense of “consistent with the unemployment rate falling.” A bit paradoxically, the strongish jobs number didn’t actually lead to the unemployment rate falling as an improved climate seems to be pulling some people back into the labor force. But short-term blips aside, the point is that these are the kind of numbers that, if consistently posted, will get us on track to full employment. The trouble is that unless the rate of change further improves, that happy day is still a long way off:
That’s total nonfarm payroll employment. As you can see, the economy has a long way to go to get back to full employment. There are still 15.3 million unemployed Americans—about 10 million more than there were in April of 2000. There are another 9.2 million people who are still employed part-time for economic reasons. Underemployment remains an enormous problem. The American economy must sustain montly numbers like this for years to get back to a “normal” rate of unemployment.
Even worse, a good chunk of those unemployed people have been unemployed for a long time, and people who’ve been unemployed for a while tend to have real problems finding jobs:
But “normal” may not be what it used to be. Long-term unemployment continued to rise. Some 6.7 million Americans have now been out of work for more than 6 months—46% of all unemployed workers. The mean duration of unemployment rose to 33 weeks, and the median rose to 22 weeks. The economy may absorb many of the short-term unemployed fairly rapidly as growth continues, but this large and growing pool of long-term unemployed will be difficult to put back to work.
Given that the Obama administration seems determined to begin pursuing fiscal retrenchment sooner than we’re likely to see full employment, I think it’s really vital that the administration task some of the smart folks on its economic team with devising some kind of program to specifically target the long-term unemployed. Otherwise there’s a real risk that we’ll end up with a semi-permanent level of high unemployment and reduced output effecting 2-3 percent of the workforce for a generation.