At an Average of 246,000 Jobs a Month in 2014, It Will Be the Summer of 2017 Before We Return to Pre-recession Labor Market Health
Dramatically falling employment in the Great Recession and its aftermath has left us with a jobs shortfall of 5.6 million—that’s the number of jobs needed to keep up with growth in the potential labor force since 2007. Each year, the population keeps growing, and along with it, the number of people who could be working. To get back to the same labor market we had before the recession, we need to not only make up the jobs we lost, but gain enough jobs to account for this growth.
The chart below projects out the potential labor force into the future. In December, the economy added 252,000 jobs; average monthly job growth in 2014 was 246,000 jobs. This is a clear improvement over the last several years, but the reality is that if we add 246,000 jobs a month going forward, it will take until August 2017 to hit the employment level needed to return the economy to the labor market health that prevailed in 2007.
Yes, job growth increased in 2014—in fact, job growth has gotten stronger each consecutive year in the recovery—and I’m optimistic that we will continue to see job growth that strong or stronger in the upcoming months. The high of the last year occurred in November, with today’s revisions bringing the number of jobs added in that month up to 353,000. If we were to create that number of jobs—the highest monthly number of the recovery—every month, we would return to pre-recession labor market health in August 2016. That’s awfully optimistic, and yet, still nearly 9 years since the recession began.