U.S. unemployment has fallen to its lowest levels since President Obama was elected in 2008, the U.S. Bureau of Labor Statistics reported Friday.
And although this is a welcome piece of news, let’s not get too ahead of ourselves. Indeed, as Alan Krueger, Chairman of the White House Council of Economic Advisers, reminds us on the White House blog, “more work remains to be done.”
Okay, that’s a bit of an understatement. As the following charts show, we have a long, long way to go before we can get back to pre-recession employment levels.
First, here’s a graph from Bill McBride of Calculated Risk illustrating the current state of labor force participation ratet:
“The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although a significant portion of the recent decline is due to demographics,” McBride notes.
But if you think the LFP rate is bad, check out the following chart comparing job losses (in percentage terms) from the start of the “employment recession” to other post-World War II recessions:
“This shows the depth of the recent employment recession – worse than any other post-war recession – and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis,” McBride notes.
But wait! There’s more! As it turns out, the current state of job losses is actually scarier than what we see in McBride’s graph.
“[His] chart cuts off when employment gets back to its previous peak. But, because of population growth, getting back to where we were five years ago isn’t enough. To get back to full employment, we need to have millions more jobs than we had then,” Planet Money notes.
Naturally, this raised the obvious question: “What would [the chart] look like if you compared the past five years with comparable periods for all of the other postwar recessions. How much worse is it this time?”
Here’s your answer:
“In previous postwar recoveries, the number of jobs was about 7 percent above its previous peak by this point, on average,” the report notes.
You know what this means, right?
It means that were this a normal (actual?) recovery, there would be approximately 10 million more jobs than at our previous peak. However, as noted in the report, there are three million fewer jobs available.
So, yes, Mr. Krueger, there’s still a lot of work to be done. A lot.
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Featured image courtesy Getty Images. This post has been updated.