For Mark Roberts’ Use: For the fourth consecutive month, the May jobs report from the Bureau of Labor Statistics (BLS) demonstrated the addition of over 200,000 new jobs. Total non-farm employment has reached 138.46 million, which surpasses the record set in January 2008 as the recession began.
So does this mean the lost jobs are back, and the economy has recovered? It’s a good sign, but it’s important to analyze other factors before leaping to conclusions.
For one thing, the unemployment rate in May was 6.3 percent, as compared to 5.0 percent in January 2008. That figure also does not represent people who have stopped looking for work, or who only work part time because they cannot find full-time employment. When those categories are included, the unemployment rate is 12.2 percent. This is still an enormous improvement over the 17.2 percent unemployment rate of 2010, but still quite a bit higher than the 8 percent rate we saw before the recession.
It’s also important to remember that job creation doesn’t always equal good jobs. From 2008 to 2010, 78 percent of the jobs lost were in the middle- to high-wage brackets. But 44 percent of the jobs created since February 2010 have been in the lower-wage industries. In other words, we’re replacing lost jobs with lower-paying positions. Some jobs are better than no jobs, of course, but what the economy really needs is workers who earn enough that they can get out there and spend money.
At current time, employers are taking longer to fill open positions than at any other time since 2000. Some employers indicate difficulty in finding workers with the right skills and experience. This could mean employers are forced to raise wages in order to attract the workers they want, which would be a very positive trend for the economy. At current time, though, that remains to be seen.
We’re definitely seeing signs of an improving economy, but we aren’t out of the woods yet. Over the next year, we hope to see a rise in higher-paying jobs, which would stimulate broader economic growth.
U.S. Bureau of Labor Statistics, 2014
USA Today, January 12, 2014
CNNMoney, April 28, 2014
National Conference of State Legislatures, 2014
Federal Reserve Bank of St. Louis, 2013
Business Roundtable, 2014
USA Today, April 21, 2014
Bloomberg Businessweek, June 12, 2014