On Friday, the Bureau of Labor Statistics will release the September numbers on the state of the labor market. As usual, I’ll be paying close attention to the prime-age employment-to-population ratio (EPOP) and nominal wages, which are two of the best indicators of labor market health. Friday’s report will also give us a chance to examine the “teacher gap”—the gap between local public education employment and what is needed to keep up with growth in the student population.

The unemployment rate has fallen steadily over the last six years, and many have said that the current rate of 4.9 percent means we are back (or at least very close) to full employment—meaning that pushing unemployment any lower would cause inflation to accelerate above the Federal Reserve’s preferred 2 percent target. That is why some observers are calling upon the Fed to raise rates—before workers see the economic recovery translate into consistently strong nominal wage growth.

But the headline unemployment rate (which is notably higher than previous labor market peaks) continues to understate slack in the labor market. Today’s 4.9 percent unemployment rate is associated with much lower prime-age EPOPs—the share of the working age population who is actually working—than in the recent past. To make that comparison, let’s look at where prime-age EPOPs were in the last two business cycles when the overall unemployment rate was 4.9 percent. The graph below shows that the prime-age EPOP averaged 80.9 percent in the three months the unemployment rate hit 4.9 percent in 1997 and 79.5 percent in the two months unemployment hit 4.9 percent in 2005. On average, those five months saw a 2.5 percentage point higher prime-age EPOP (80.3 percent) than the average 77.8 percent we’ve seen in the five months with 4.9 percent unemployment this year.

An unemployment rate of 4.9 percent no longer conveys the same information about the tightness of the labor market as it had in the previous business cycles. The last business cycle, like the current one, was plagued with demand that was too weak to get us to genuine full employment, but the extent of that weakness was hidden if you just looked at headline unemployment. We still have a chance of reaching genuine full employment in the current recovery, as long as the Fed keeps its foot off the brakes. Before we can say that the labor market is truly back to full employment, we need more months of strong job growth—to employ new labor market entrants, unemployed workers, and the 2 million-plus “missing workers” who have left or never entered the labor market because of weak job opportunities.

Once the labor market tightens sufficiently, we should see that translate into consistently stronger nominal wage growth, the second key indicator I’ll be watching on jobs day. While there has been some mild pick-up, year-over-year nominal wage growth has only averaged 2.5 percent this year so far, below levels consistent with the Fed’s 2 percent inflation target and long term trend productivity growth.

Lastly, Friday’s report will give us an opportunity to update our analysis of the teacher jobs gap. Thousands of local public education jobs were lost during the recession, and those losses continued deep into the official economic recovery. This has been true of public sector jobs in general—continued austerity at all levels of government has been a drag on public sector employment, which has yet to return to its pre-recession level, let alone a level to keep up with population growth.

The costs of a significant teacher gap are measurable: larger class sizes, fewer teacher aides, fewer extracurricular activities, and changes to curricula. And, in sheer numbers, the teacher gap can explain a non-trivial part of the overall jobs gap. On Friday, I will compare where jobs in public education should be, using the pre-recession ratio, student population growth, and the most recent jobs numbers.