A contrarian perspective on employment growth
The report on the employment situation was taken as a very positive sign. Superlatives abounded. Foxnews begins its article:
Employers added 211,000 jobs in a springtime hiring burst that benefited almost all sectors of the economy and lowered the national unemploment rate to 4.7 percent.
Most observers concurred, although with some caveats, and a bit less gushingly. There’s been extensive discussion at Angry Bear (Kash and PGL) and Macroblog, among others. I don’t want to disagree with anything noted there. Rather, at the risk of saying something that’s already been said, I want to highlight some aspects of the recent numbers that have been neglected. First, it is interesting that the civilian employment numbers (adjusted to conform to the payroll employment series) has converged to the payroll employment figures. Hence, one cannot say that the civilian employment numbers are substa ntially more robust than the payroll numbers.
Figure 1: Payroll employment and Adjusted civilian employment series, in log terms. Source: BLS.
Second, despite the recently accelerating growth, the paryoll employment numbers remain well below what they would have been had the recovery evolved as it did after the 1990-91 recession.
Even using the unadjusted civilian employment series (for discussion of the adjusted civilian employment series, see this post), the current recovery only matches the post-1991 recovery, itself not known as a period of rapid employment growth.
Figure 3: Unadjusted Civilian employment (over 16) trends for 1982-87, 1991-2000, 2001-present episodes, normalized to 1.00 at trough. Source: BLS and author’s calculations based on NBER recession dates.
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