August Jobs Numbers Are Out

The August jobs numbers are out, and it's not a pretty picture. Only 96,000 jobs were created, which was (surprise!) "lower than expected." Four times that many people gave up on finding a job and dropped out of the work force - which lowered the U3 unemployment number from 8.3% to 8.1%. (As we've discussed before, the U3 unemployment number, which is the one that's always reported, only counts people who are actively looking for work.) The labor force participation rate - that's the percentage of the working age population that is either working or looking for a job - is now 63.4%, the lowest it's been since 1981. For men, it's 69.8%, which is the lowest EVER on record.

According to the "Jobs Gap" calculator at http://www.hamiltonproject.org/jobs_gap - which calculates the amount of time it will take to return to pre-recession employment levels while also absorbing the people who enter the labor force each month, at that rate of job creation, the Jobs Gap won't be closed until sometime after 2025. To put that in perspective, five years after the start of the last three recessions ('82, '90, and '01), private sector employment levels were well above their pre-recession levels.

We need to be creating jobs at the average rate of about 325,000/month to close the gap in the next four years - but, over the last 30 months, we've only created an average of 157,000/month. (Feel free to click through to the calculator, and play with the numbers. You can enter any number greater than 88,000 and it will tell you how long it will take at that rate to close the jobs gap.)

But, hey, the good news for the President is that if enough additional people give up looking for work and drop out of the labor force, the reported U3 rate might actually be under 8% by election day!