President Obama mentioned “jobs” only three times in his recent inaugural address, “workers” one time, and “unemployment” zippo. The January jobs report provides a sober reminder that the US labor market, while recovering, remains extraordinarily weak. The official unemployment rate ticked up to 7.9% as 157,000 net new jobs were created, according to the Labor Department.
To provide some context, recall that back in January 2009 Team Obama economists Jared Bernstein and Christina Romer predicted the unemployment rate by 2013 would be closing in on 5%. (Of course, Obama’s economists also thought we’d be in a mini-boom of 4%-plus economic growth. That hasn’t happened either.) Oh, and at the January pace of job creation, we won’t return to pre-Great Recession employment levels until after 2025, according to the Hamilton Project’s Jobs Gap calculator.
Now, there were some nice upward revisions to 2012 job growth. Instead of an average of 153,000 net new jobs a month last year, the US economy generated more like 181,000 jobs. And strong upward revisions to the November and December numbers suggest economic growth may not be as weak as the fourth-quarter GDP report suggests.
But two broader measure of labor market health — the employment-population ratio and the labor force participation rate — remain stuck at anemic levels. Indeed, if labor force participation were the same as when Obama took office, the unemployment rate would be 10.8%. As it is, the U-6 unemployment rate — which includes a) part-timers who want full-time work and b) the discouraged who want a job but haven’t searched for work in the prior month because they believe no jobs are available — remained at 14.4% for the third straight month.
When might the economy return to the sort of unemployment rate we saw before the Great Recession, say, 4.5% or so? Let’s assume a) labor force participation regains half the ground it’s lost over the past four years, and b) job growth keeps turning in 2012-like performances. According to the Atlanta Fed’s jobs calculator, it would take another eight years to get back to the unemployment nadir of the George W. Bush administration. And that’s assuming, we don’t suffer another recession between now and then.
No wonder the president doesn’t want to talk about jobs.