Muddled by unemployment complexity? Straight employment numbers suggest recession is not over

Robert Higgs of the Independent Institute has just noted a few revealing data trends that place claims of recovery in doubt. He rightly points out that the unemployment numbers are confusing and politicized. On the other hand, straight employment numbers, while still problematic, are less open for manipulation and easier to understand.

When one looks at the proportion of the population employed, however, there has been no rise since it began falling rapidly in 2007.

In 2007, the ratio for both sexes combined was about 63 percent. In 2008, it fell steadily, and by December it had reached 61 percent. In 2009, it continued to fall steadily, and by December it had reached 58.2 percent. At that point, it more or less stabilized at its recession low point, and during the past two years it has remained in the range 58-59 percent. The most recently reported ratio, for January 2012, was 58.5 percent.

Consistent with the “jobless recovery” moniker, the supposed recovery does not appear to have replenished employment—at least not as a percentage of the working-age population. And that is inconsistent with past recovery periods, as one can see from the graph. The employment trend also affirms that lower published unemployment rates are a reflection of more people giving up and dropping out of the labor force, rather than people returning to work.

Written by

Fergus Hodgson

Director of fiscal policy studies at the John Locke Foundation, policy advisor with The Future of Freedom Foundation, and host of The Stateless Man radio show on the Overseas Radio Network. Although born in New Zealand, he now bases himself in the United States. You can follow him on twitter @FergHodgson (en español @Fergusito).

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