The unemployment numbers: good news, but lack context [UPDATE]
But … and you knew there had to be one… what does that mean in relation to the job losses we’ve suffered during this recession?
In the past, the number for this month would have been a good number because it would have reflected a maintenance level of job creation. Essentially the number of jobs created kept pace with the expansion of the labor market as new workers entered it.
But we’ve lost millions and millions of jobs in the past 39 months. So what is it going to take just to get back to even (i.e. where we were prior to the recession)?
Here’s an infographic to graphically present the problem:
To actually climb out of the unemployment hole that the recession dug, we need to see 755,000 jobs a month for 7 months to bring us back to pre-recession job levels. Why 7 months? Heh … well, you figure it out.
UPDATE: According to James Pethakoukis, the unemployment rate also lacks validity. He makes a point Dale has made any number of times:
If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7% then vs. 63.9% today—the U-3 unemployment rate would be 10.8%.