The jobs report released this morning marks six years since the official start of the Great Recession in December 2007 and four-and-a-half years since its official end in June 2009. Today’s report shows a very weak labor market, and the continued fleeing of workers from the labor force because job opportunities are weak.
The unemployment rate dropped from 7.0 percent to 6.7 percent in December, but as has been a constant refrain throughout this recovery, the improvement was not for “good” reasons. The share of the working-age population with a job did not increase in December, and the labor force participation rate dropped back down to its lowest point in 35 years. The number of “missing workers” increased from 5.6 million to 6.0 million. (Missing workers are jobless workers who are not actively seeking work but who would be either employed or looking for work if job opportunities were stronger, after taking into account long-run demographic trends.) If these workers were in the labor force looking for work, the unemployment rate would be 10.2% instead of 6.7%.
The job growth of 74,000 in December brought the average monthly growth rate in 2013 to 182,000, just under the average monthly growth rate of 2012, which was 183,000. Much has been made of the supposed acceleration in labor market strength, but it doesn’t appear to be happening. At the average growth rate of the last three months—172,000 jobs per month—it will take nearly six more years for the labor market to regain pre-recession labor market conditions.
With job opportunities so weak for so long, workers have gotten stuck in unemployment for record lengths of time. Last month, the extensions of unemployment insurance benefits were allowed to expire—an unprecedented move given the weak state of the labor market. The share of the workforce that is long-term unemployed (i.e., jobless for more than six months) is nearly twice as high today as it was in any other period when we allowed an extended benefits program to expire following earlier recessions. This is no time for Congress to turn its back on the long-term unemployed.