The May jobs report, released yesterday by the Bureau of Labor Statistics, was celebrated as evidence of an economy rebounding from an economically-scary first quarter in which GDP (gross domestic product) actually declined by a significant 1%. Another quarter of decline and the economy would officially be declared in recession. So another month of job gains that exceeded 200,000 (the total was 217,000) was a relief. Little discussed is the fact that it’s down significantly from April (282,000).
Manufacturing managed to eke out a gain of 10,000 jobs, all in durable goods, driven mostly by auto manufacturing. Aside from durable goods, manufacturing employment actually fell by 7,000 jobs.
Construction was worse, squeaking out only 6,000 new jobs.
Much was made of the fact that the “employment level” – a statistic from the household survey – has returned to pre-recession levels. Well, that depends on when you consider that the recession actually began. Officially, it began with the 4th quarter of 2008 when GDP began to decline. But by that time, the employment level had already fallen by over a million jobs, and the employment-population ratio was already in free-fall.
The report is riddled with the word “unchanged.” Aside from the headline number from the establishment survey, there wasn’t much to celebrate. Per capita employment is essentially unchanged over the past four months and has actually fallen slightly in the past two months. Here’s the chart: Per Capita Employment. Note that, although per capita employment rose above 45% in November of 2011 for the first time since the start of the recession, it has not managed to crack 46% yet. When I first began tracking this data in November of 2007, per capita employment was at 48.4% and in the midst of a rapid plunge from earlier, even higher levels.
The long and short of it is welcome to the world of “new normal” – high unemployment, lots of part-time work and low wages. It’s now accepted. This is about as good as it gets now in an economic “recovery.”
If this is recovery, what will the next recession look like?