What to Watch on Jobs Day: An All-time High of an Indicator That is Almost Always Rising

It is very likely that when the jobs numbers are released tomorrow morning, we will learn that the total number of jobs in the U.S. labor market surpassed its pre-recession peak.  I predict you will see many headlines along the lines of “U.S. Employment at All-Time High.”

It is difficult to exaggerate how not a big deal this is. Total employment is almost always rising, as the figure below shows. An all-time high of something that is almost always rising is just not that interesting.

Furthermore, it is an utterly meaningless benchmark economically. Because the working-age population (and with it, the potential labor force) is growing all the time, we should have added millions of jobs over the last six-plus years just to hold steady. That means that when we get back to the prerecession employment level, there will still be a huge gap in the labor market. We currently have a gap in the labor market of 7.1 million jobs. When the numbers are released on Friday, that gap will likely drop to 7.0 million. We are far, far from healthy labor market conditions.

gap excerise since 1939