A Good Employment Report by Our Current Low Bar of Diminished Expectations

Since mid-2011, the U.S. economy has only been creating jobs at a pace fast enough to raise the employment to population ratio by half a percentage point.

I used to teach my classes that the U.S. economy was so flexible that we would recover 2/5 of the way back to full-employment trends in a year. It has been two years, and rather than seeing the gap between the employment-population ratio and its demographic trend fall from 4.4% points to 2.6% and then to 1.6% points, all it has managed to do has been to fall from 4.4% points to 3.4% points...

Since mid-2011, the U.S. economy has added payroll jobs at the rate of 170,000/month. Of that, about 675,000 in total have gone to raise the employment-to-population ratio, while 3,325,000--140,000--have gone to keeping the employment-to-population ratio constant. If you figure demographics are driving a wedge of 15,000/month between the number of jobs needed to maintain constant relative labor-force utilization and a constant employment-to-population ratio, that tells us that the U.S. economy currently needs to create 125,000 payroll jobs a month to keep labor-market conditions constant…