Econintersect: The latest employment numbers from the BLS (Bureau of Labor Statistics) were slightly better than had been expected, with 117,000 non-farm payroll jobs added in July (seasonally adjusted data). As reported by GEI Analysis, the BLS reported that private employers added 154,000 jobs, which governments cut 37,000. This is better than losing jobs, but employment is actually losing ground. Population is growing faster than jobs.In 2006 – 2010 the population grew by an average 0.92% per year, according to estimates by the U.S. Census Bureau. With approximately 131 million people on non-farms payrolls, an increase of about 100,000 per month is 0.92% over 12 months. For the last three months, the average increase has been 72,000. This is below the population growth rate.
All of this discussion does not address the major economic problem of all the jobs lost during and after The Great Recession. This is forcefully represented by the famous graph from Calculated Risk:
The above graph demonstrates that most of the 8-9 million jobs lost during the past four years have not been regained. When the 1.2 million jobs that should have been added each year to keep up with population growth, the job “deficiency hole” is somewhere between 11 and 12 million, when the approximately 2 million jobs added from the employment low in February 2010 are added back in.
If the employment gains could be increased to 200,000 per month, it would take approximately 10 years to recover 12 million jobs above those needed to keep up with population growth.
One of the biggest reasons for failure for any significant jobs recovery to take hold is the fact that unemployment occurring as a result of the last recession has not been temporary the way it has been for other recessions since WW 2. The permanent nature of “new normal” unemployment is demonstrated by the following graph from Business Insider:
The conclusion is that millions of the lost jobs are never coming back. To make major employment gains, new jobs are going to have to be found.
Sources: GEI Analysis, Calculated Risk and Business Insider
