Everyone knows that last week’s jobs report was a bad one — a really bad one. As Patricia Cohen of the New York Times put it, the report “sent analysts scrambling for adjectives like ‘dreadful,’ ‘a body blow’ and ‘grim’ to describe just how disappointing they found the latest employment figures.”
The headline number for September was a net increase of only 142,000 nonfarm payroll jobs, which was nearly 30 percent lower than the median forecast of 96 economists surveyed by Bloomberg News. Wage growth remained anemic, and the labor force shrank by 350,000 workers, with the overall labor-force-participation rate (LFPR) dropping to a level last seen in October 1977. Meanwhile, the estimated job gains in August and July were revised downward by a combined total of 59,000.
Those figures highlight the persistent weaknesses in America’s labor market. But they don’t tell us the whole story about labor-force participation or long-term unemployment.
Start with the participation rate. It was 66 percent when the Great Recession began, 65.7 percent when it ended, and 62.4 percent in September. Baby-boomer retirements explain only part of this decline. Prior to December 2008, the LFPR among men aged 25 to 54 had never once fallen below 90 percent. It has been below 89 percent since mid-2011, and in September it stood at 88.1 percent, which is very close to the all-time low of 87.9 percent (reached in October 2013).
As for long-term unemployment, the aggregate number of long-term unemployed has declined by roughly 4.7 million since April 2010 (when it peaked at 6.8 million). Yet the long-term unemployed still represented a larger share of the total unemployed in September than they did at any point from January 1948 (when the Bureau of Labor Statistics data begin) through March 2009.
For that matter, the average duration of unemployment was longer in September (26.3 weeks) than it was at any point from January 1948 through August 2009. Meanwhile, the median duration of unemployment was longer in September (11.4 weeks) than it was in all but two months (May 1983 and June 2003) from July 1967 (when the data begin) through January 2009.
In short: We need to look beyond the headline numbers to get a more complete picture of America’s labor market. And the current picture — more than six years after the official end of the recession — isn’t pretty.