This morning’s jobs report showed the economy added 148,000 jobs in December, bringing average monthly job creation for 2017 down to 171,000. This is fast enough to keep up with population growth and even pull some workers in off the sidelines—but it is, notably, the slowest year for job growth since 2010. Year-over-year nominal wage growth, meanwhile, held steady at 2.5 percent and the unemployment rate remained at 4.1 percent.
December marks the 10th anniversary of the start of the Great Recession. While by some measures the economy has recovered, the topline numbers mask important differences in the experiences of working people. The prime-age employment-to-population ratio, for example, is still below its pre-Great Recession peak—an indication that there are still workers sidelined by the recession. It’s even further below the full employment economy benchmark of 2000. At just 2.5 percent in December, wages need to grow much faster, and for a sustained period of time, before it’s safe to say we’ve fully recovered from the Great Recession. Employers should be lining up for workers—instead of workers competing for jobs.
The fact that we have still not fully dug ourselves out of the hole created by the financial crisis by this milestone is a stark reminder of how deep that hole was—and how unwise it was to turn towards austerity before the economy had fully recovered. It is also important to remember that the 2007 economy is an inadequate benchmark. The goal should be full employment, which we have not seen since 2000, not just returning to the weak labor market of 2007.