Employment Data in Perspective: How Bad is the US Recovery?

US employment growth during the past twelve months looks strong on absolute numbers, but weak in historic perspective. In every previous economic dip, employment growth restored overall payroll employment to the long-term trend. Overall employment remains well below the historic trend.


Between 1985 and 2008, for example, the trend line shows a 99% regression coefficient against the actual payroll number. Employment climbed back to the trend line after each previous recession. After 2008, employment fell and remained well below the trend line—by 12 million jobs, or more than 8% of total employment.


Correspondingly, the employment-population ratio has fallen from 64% to 59%: This chart matches almost exactly the deviation of employment from the trend line.


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