The November jobs report from the BLS was the most encouraging in a long time, because all three indicators of employment that I look at headed in the right direction. The employment rate (which is 100-the unemployment rate), the labor force participation rate (the percentage of adults who are in the labor force instead of sitting on the sidelines), and the employment-population ratio (the percentage of adults who have work) all ticked up by either .2% or .3%.
Another encouraging recent piece of news is the upward revision in America’s GDP growth rate for the 3rd quarter of 2013. It’s now estimated at 3.6% per year, which is a healthy clip.
Of course, these two happy trends are closely related. As Erik B. and I argue in The Second Machine Age (out in January, available for preorder now), the best way to grow jobs today is to grow the economy. Robots and AI are still far from complete substitutes for human labor, so if companies want to grow they’ll generally need to hire people. We’ve written about the unfolding ‘great decoupling‘ between economic growth and employment growth, but it’s not yet anything like a complete divorce, if it ever will be.
The jobs crisis is still far from over, however. To see this, all we have to do is draw two of the stats above over a long time scale:
The employment-to-population ratio has hardly recovered at all from its plunge during the Great Recession, and the labor force participation rate has been on a steady and nasty downward trend since the economic slump started. It’s going to take a lot of work and a lot of time to get these lines on a better trajectory.