A much-needed reminder that despite the recent upturn in the jobs market, there is still an awfully big employment hole to fill, as JPMorgan economist James Glassman points out:
A useful way to assess the challenge for the US economy is to ask, How many jobs would need to be created to recover the ground lost in this last recession. Focusing only on official unemployment, currently 12,806,000 million are classified as officially unemployed. In a normal, fully-employed economy, the unemployment rate would be expected to be 4.5 to 5.0 percent. In that case, the natural number of unemployed people would be 7 to 8 million, respectively. So, for the unemployment rate to fall from 8.3 percent to 4.5 to 5.0 percent, the economy would need employ 6 million to 5 million people, respectively, of those who currently are unemployed.
What about the larger picture that includes the hidden unemployed? How many jobs are needed to restore the ratio of employed people to the total population back to where it was in 2007, prior to the economic downturn. Under normal circumstances, there would be 153,000,000 jobs, including parttime jobs that people hold voluntarily. Currently, however, the number of full-time jobs and those who are holding part-time jobs voluntarily stand at 138,189,000.
In other words, to restore the job market to the state it was in back in 2007, before the recession, would require the creation of 14.8 million jobs in today’s terms, a daunting task to say the least.