Economics, U.S. Economy

The steady-but-too-slow labor recovery continues

Image Credit: Shutterstock

Image Credit: Shutterstock

Today’s employment report is a little disappointing, but in keeping with the steady-but-too-slow recovery in the labor market that we’ve come to know and not to love these past few years.


Payroll jobs grew by 162,000 in July, and the unemployment rate dropped to 7.4%. Over the past three months, we’ve added an average of 175,000 jobs per month — right about where we’ve been for quite some time. That’s more jobs than are needed to keep up with population growth, but fewer than are needed to restore health to the labor market.

The share of the working-age population who are employed stayed the same in July. The labor force shrank slightly, and the labor force participation rate fell a little, but was basically unchanged. We have much work to do on the employment front. We cannot declare victory in the labor market until those lines are no longer flat.

The average workweek shortened a bit — employment went up, but hours went down. This tempers the good news of July’s employment gains. In addition, the number of workers working part time for economic reasons, now at 8.2 million, increased a bit as well. At this stage in a recovery that number is too high and should be decreasing, not increasing.

Average hourly earnings decreased slightly. Add in the fact that inflation is below the Fed’s target, and it is clear that we do not have an immediate inflation problem.

Government actually added 1,000 jobs. Both the federal government (excluding the postal service) and local government saw increased payrolls. Sequester, where art thou?

For many segments of the labor market, times are still very tough. The unemployment rate for high school dropouts rose 0.3 percentage points to 11%. For high school graduates, the unemployment rate is 7.6%. We still have a staggering 4.2 million folks who have been unemployed for 27 weeks or longer. This is a societal emergency.


The president gave a couple big speeches on jobs and the economy in the past few days. He basically ignored the unemployed, focusing instead on long-term economic challenges facing the middle class. Today’s unemployed deserve more government attention than tomorrow’s middle class. They deserve more presidential attention.

There are steps government can take to help the unemployed — steps that both conservatives and liberals can support. I discuss some of them in the June 3rd issue of National Review. The president should use his bully pulpit to discuss these and many other suggestions. We’ve heard enough about green energy jobs for tomorrow’s middle class. We need to hear more about how the government plans to meet its responsibility to help the truly vulnerable and suffering.

Michael R. Strain is a resident scholar at the American Enterprise Institute. Follow him on Twitter at

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