Chart of the Day: Enormous US Jobs Deficit
Catherine Rampell provides this chart from Amanda Cox. Rampell says:
The United States added just 18,000 nonfarm payroll jobs over all in June, the Labor Department reported Friday, after having added 25,000 jobs the previous month. Neither figure is statistically significant from zero, given that the growth is compared to a base of 131 million jobs.
We are now 5% short of the pre-recession job level according to these data.
If you think about this figure as representing the jobs deficit since the recession began 3 1/2 years ago, then you would have to add 250,000 to 300,000 per month (about 1% population growth per annum) to the 138 million employed in December 2007 to account for population growth. For example, during the jobs recovery years of 1994-1997, the US economy went from 112.5 million jobs in January 1994 to 122.6 million in July 1997.
My back of the envelop calculation puts that at 10.5 million more jobs missing from the US economy for a total jobs shortfall of 13%. That’s enormous.
Scale that back to just 150,000 jobs per month (0.6% population growth per annum) and you are still missing over 13 million jobs or 10% of the total.
In fact, if you go back to the last jobs peak of 132.5 million in February 2001, at a pace of 150,000 jobs per month to account for population growth, you are looking at a shortfall of 18.8 million jobs. Given those numbers, there is really no amount of tweaking or massaging the data that can diminish how astonishing the jobs shortfall now is.