US UNDEREMPLOYMENT: GET USED TO IT

To put the American Jobs Act and the task ahead in perspective:

ISI calculates that the working age population should increase about 12 million over the next 5 years. Monthly employment gains of 200k would therefore merely absorb these newcomers.

Then, assuming that the employment/population ratio increases from the current 58.2% to 62%, another 70k monthly new jobs would be needed.

US EMPLOYMENT/POPULATION

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As the chart below reveals, monthly job creation exceeding 250,000 is rare nowadays.

MONTHLY EMPLOYMENT CHANGE

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Since 1990, it only happened in 1994 (320k monthly average), in 1997 (280k) and in 1999 (264k). Since 2000, the best year was 2005 when the economy created 208,000 jobs on average. During the last 12 months: +104,917.

 

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