Employment’s Bottomless Pit
By Mira Korber, guest blogger.
The U.S. economy added 227,000 jobs in February. That’s more than the 210,000 jobs economists forecast for the month, though the current unemployment rate is still high: 8.3%. (For a different take on the issue, read here.)
This analysis of the jobs report determines that with sustained growth of 250,000 jobs/month by November, election time employment will clock in at 8%.
Sunny news, right? Yes, but maintaining this growth rate would only bring employment back to pre-recession rates after a whopping eight years, according Michael Greenstone and Adam Looney of the Hamilton Project. Find their study on the “jobs gap,” including demographics, immigration, and generational variables, here.
Though slightly dated, this study shows why the average American may not “feel” as though things are getting better. The higher the GDP, the more quickly employment will increase, but the gap between what the US could produce and what it actually produces is ever broadening. Until the actual production catches up with potential production, employment cannot fully recover. Unfortunately, if growth hovers around 2%, employment won’t catch up at all.
The Economic Lesson
In the past decade we’ve experienced “jobless recoveries.” By contrast, we’re adding jobs right now, but can it last with a sluggish GDP? Read here for financial journalist David Leonhardt’s opinion.