The last Bureau of Labor Statistics (BLS) jobs report of 2019 comes out on Friday, giving us a chance to step back and look at how working people fared over the entire year. The report also marks the 12th anniversary of the official start of the Great Recession. My expectation is that the December data will confirm that the economy has nearly recovered its immediate pre-Great Recession health—the last year before the Great Recession hit. Wage growth, which slowed over the last year, is a notable exception.

However, as I have often noted, 2007 should not be considered a benchmark for a fully healthy economy for America’s workers. Almost all labor market measures were notably weaker in 2007 than they were at the previous business cycle peak in 2000. There was very little reason to think that the U.S. economy in 2007 was at full employment. If one looks at the stronger business cycle peak of 2000 as a more appropriate benchmark, the economy in 2019 looks even further from full employment. Many working people are still not seeing the recovery reflected in their paychecks—and the economy will not be at genuine full employment until employers are consistently offering workers meaningfully higher wages.

In this blog post—and Friday when the December numbers come out—I’m going to look at average payroll employment growth over the last several years. Because there is always a bit of volatility in the monthly data—especially in the household series that has a smaller sample size—taking a year-long approach allows us to smooth out the bumps and take stock of the key measures: payroll employment growth, the unemployment rate, the employment-to-population ratio, and nominal wage growth.

The figure below shows average nonfarm employment growth for 2007–2018 and for the first 11 months of 2019. With an average of 180,000 new jobs being added each month, job growth in 2019 is a bit softer than 2018 and more in line with what we saw in 2017. This pickup in 2018 can be attributed to the shift in federal policy from austerity to stimulus in the form of both tax cuts and an increase in government spending. In particular, Congress boosted spending by almost $150 billion, contributing significantly to economic growth in 2018. But, in 2019, spending held steady at $150 billion, meaning there was no additional government spending to continue stimulating demand, and we saw a mild softening of employment growth.

At the current pace of growth, however, the labor market continues to not only absorb population growth, but also chip away at the slack remaining in the labor market—namely workers who continue to be sidelined and who I expect will enter or re-enter the labor market as opportunities for jobs and better pay expand. As it turns out (and what we’ve long argued), workers who left or never entered the labor force during the Great Recession and its aftermath were not necessarily permanently sidelined, but have systematically been returning to the labor market as job opportunities have strengthened. Over the last few years, the newly employed have been coming both from the ranks of the unemployed as well as from outside the labor force, those who were not actively seeking work the month prior to finding a job. In fact, as the figure below illustrates, the share of newly employed workers who did not look for work the previous month is at a historic high. About three-fourths of newly employed workers are coming from outside the labor force.

Further evidence of a steadily improving economy is the unemployment rate, which—after falling steadily for eight years from its peak in the fourth quarter of 2009—continued to fall through 2019 to a low of 3.5% in November, an average of 3.7% for the first 11 months of the year. It is now far below its Great Recession peak (10.0%), and significantly below its pre-Great Recession low of 4.4% in the spring of 2007. But despite today’s low water mark, there is still room for improvement. And evidence suggests that the unemployment rate may be overstating the strength of the labor market. The previous figure supports this claim, given that a record high share of newly employed workers are coming from outside the labor force and are not counted in the official measure of unemployment in the previous month, despite clearly being ready and willing to work.

Furthermore, other measures show that the current unemployment rate is associated with more slack in other labor market measures than in the past. For example, the share of “prime-age” (ages 25–54) workers with jobs—the prime-age employment-to-population ratio (EPOP)—has finally reached its pre-Great Recession peak but, as the figure below shows, is still significantly below its full employment peak of 81.9%. That suggests there still is ample room to pull in workers who remain idled.

The last thing I’ll note about the unemployment rate is that an average unemployment rate of 3.7% in 2019 obscures the great variance of experiences in the labor market for different population groups. The figure below shows unemployment rates by race and ethnicity. The black unemployment rate (in dark blue) has come down significantly in the recovery, but it still is considerably higher than the white unemployment rate (5.5% vs. 3.2%). Because of the roughly 2:1 ratio of black–white unemployment rates—historically persistent but not immutable with policy—each additional reduction in overall unemployment that can be attained actually provides disproportionate benefits to workers of color. Given that these workers have historically faced discriminatory barriers to labor market success, this is an enormously valuable benefit of chasing full employment.

The last, but not by any stretch least, measure to watch on Friday is nominal wage growth. In November, nominal wages grew at 3.1% over the last year. What is particularly striking in the figure below is the slowdown in the rate of growth in private-sector wage growth over the last several months, and its divergence from the production/nonsupervisory series. After hitting a peak of 3.4% growth in February, private-sector wage growth has been slowing. The average growth rate in 2019 so far remains higher than in 2018 (3.2% vs. 3.0%), but the recent trend is troubling. Signs of slightly stronger wage growth among the approximately 82% of workers in production/nonsupervisory jobs is promising but doesn’t warrant celebration on its own because, as the figure shows, periods of stronger wage growth for production/nonsupervisory workers in this recovery tend to be followed by periods of relatively weaker growth.

On the whole, I expect December’s numbers on the economy to confirm the patterns we’ve seen from this year so far. While the economy continues to move the right direction—with the exception of the recent troubling wage trends—we still have a ways to go to reach the type of economy we experienced in 2000.