The economy added 117,000 jobs in July, slightly beating consensus estimates, but still short of the 130,000 to 150,000 needed to keep up with population growth in the latest sign of “new normal” economic conditions.
The Bureau of Labor Statistics reported that 9.1% of the workforce was unemployed, a slight improvement over the 9.2% rate economists estimated ahead of Friday’s report; private sector jobs grew by 154,000, while government jobs declined by 37,000.
Particularly noteworthy in the report was an employment-to-population ratio that edged down to 58.1%, little changed from last month’s 58.2%, but now reaching a low that has not been seen in 28 years.
The low percentage of Americans holding jobs in the summer of 1983, at the peak of unemployment amid the early 1980s recession, was a blip in an era of generally high workforce participation marked by two-earner households. But it was not a normal level since the 1950s and early 1960s, when single-income households were common. A workforce participation rate in 60% to 65% range has been the norm since the 1980s.
Sifting through the data, financial blogger Doug Short notes what is perhaps the most worrisome statistic in the BLS report: a long-term rise in the duration of unemployment to just under twice the level of the early ’80s recession. The average length of unemployment is now 40.4 weeks, compared to 21.2 weeks in 1983 and 32.6 weeks one year ago. Says Short in his Advisor Perspectives blog: “We are perhaps seeing a paradigm shift — the result of global outsourcing and efficiencies of technology. The post-recession duration of unemployment continues to rise.”
Short cites a chart from the Calculated Risk blog showing the drop in employment in the current recession is far more severe than all other post-war recessions — with 5% to 6% declines from peak employment; that figure in other postwar recessions clustered between 2% and 3%.