This Friday’s employment report from the Bureau of Labor Statistics marks four years since the official start of the recovery, in June 2009. Four years into a tepid recovery, with nearly 12 million unemployed workers and millions more not even looking for work because of weak job opportunities, it is worth examining our expectations going into Friday’s numbers.
Since late 2010, the economy has been adding an average of about 175,000 jobs per month. Because this pace has persisted for so long, unfortunately many have begun to assume it is the best we can do. The economy currently needs 8.5 million jobs to get back to the labor market health we had in December 2007, which means that, at this rate, we won’t return to the pre-recession unemployment rate before the end of this decade.
Recently, commentary on “jobs day” has focused on whether job growth was higher or lower than forecasters expected, rather than on whether the economy is creating enough jobs. Beating expectations may matter to people who closely follow financial markets that fluctuate if the numbers are higher or lower than expected—but it does not matter to the vast majority of people. What matters to the millions of unemployed and underemployed Americans—and to those who have a job but have not seen a raise for years—is job growth that will lead to a healthy labor market soon.
The consensus heading into Friday’s release is that the economy added 161,000 jobs in June. If it turns out we beat expectations and again added 175,000 jobs, that would not be good news. What would be good news? One reasonable benchmark would be a rate of growth that would get the economy back to the pre-recession unemployment rate within another three years. And to get back to the pre-recession unemployment rate by June 2016, three years from now, we would need to add 300,000 jobs per month.
Heidi Shierholz and Lawrence Mishel are available for interviews about the Employment Situation Report throughout the week, including Friday, July 5th.