While the attention of the media and lawmakers in Washington has flitted from the recent government shutdown to the troubled rollout of the Obamacare website, today’s jobs numbers offer a stark reminder that the U.S. economy has yet to recover from the problems that have dogged it since at least as far back as the financial crisis.
The Labor Department announced this morning that the U.S. economy added 148,000 jobs in September, while revisions of previous reports showed that there were 9,000 more jobs in the economy than previously thought. While the headline unemployment rate fell from 7.3% to 7.2%, the actual change was a decline from the August rate of 7.278% to 7.235% in September so the headline rounding doesn’t represent a significant decline.
The unemployment rate’s decline would be proceeding at an even slower pace if there weren’t more dropping out of the labor market altogether. As a result of a generally aging workforce, the number of people who want to work had been on the decline even before the financial crisis, but the weakness of the economy has accelerated this trend:
Another way to illustrate this point is to show that while we’ve been consistently adding jobs since the recession ended in 2009, the economy still 1.8 million fewer jobs than in 2008:
Another force holding back the job market and the economy is the slow pace of wage growth. This morning’s report showed that the average hourly earnings for all employees rose by three cents, and 49 cents for the year. The good news is that wage growth has been slightly outpacing inflation over the past year and since the recession. The bad news is that it’s only very slightly outpacing inflation, and the stagnant pace of wage growth is a continuation of a trend that has been happening since more or less the 1970s.
Even the modest economic and job growth we are seeing aren’t filtering down to the average Joe. Politicians on the left and right will use these numbers to trumpet their favorite policy prescriptions, and there’s no doubt that Congress’ antics aren’t helping the labor market. But much of what is ailing the economy are long-term trends that have plagued us through periods in which both conservative and liberal economic policies were being implemented.