December 3, 2023

Economix: A Long, Slow Slog Back to Normal

While the 216,000 net jobs that the economy added last month were certainly welcome, the growth wasn’t nearly fast enough to get the country back on the path to full employment anytime soon.

The Great Recession dug the country’s job market into a very deep hole. As I mentioned in an earlier post, the economy today still has 5.3 percent fewer nonfarm payroll jobs than it had when the recession began in December 2007. If payroll growth continues apace with the gains experienced in March, it will take nearly three years for the economy to recover the jobs lost during the recession.

The chart below shows what this long, slow slog would look like. (The Brookings Institution put together a similar chart a few months back.)

The solid blue line shows the change in employment since the recession started over three years ago. As you can see, the line stops in March 2011, which is the most recent employment data point we have. The dashed blue line shows what employment would look like if the economy added exactly 216,000 jobs each month:

DESCRIPTIONSource: Bureau of Labor Statistics

As you can see, the dashed blue line finally reaches the level of prerecession employment in January 2014 — nearly three years from now.

The dashed green line is one alternative, if unlikely, trend. It shows what job growth would look like if, from here on out, the economy had monthly job growth as strong as it was during the best month of the 2000s — 472,000, the number of jobs added on net in March 2000. Even at that (very optimistic) pace, payrolls would not recover the ground lost during the recession until July 2012.

Even more depressingly, none of this takes into account the fact that the number of working-age Americans has been growing in the last few years, which means that if the economy were healthy it would have more jobs today than it had at the beginning of the recession.

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