Unemployment Falls Below 6% for First Time Since 2008, Marking Longest Continual Job Recovery in U.S. History

The employment recovery following the Great Recession has been discouragingly slow, but many point out that it has also been uncommonly steady. In fact, it is the steadiest job recovery in American history.

President Obama gets flack from both the right and left for the weak recovery, but at least he can respond with evidence that the economy has been slowly and steadily grinding along in the right direction. The downside, of course, is that stagnant wages and workers dropping out of the labor force altogether have been equally tenacious.

Last month U.S. employers added nearly a quarter million new jobs (248,000) to the nation’s payroll, according to a Bureau of Labor Statistics report on Friday. This marks the 48th consecutive month of job growth, tying the longest stretch since the BLS started keeping those statistics back in 1939. The only other uninterrupted four-year employment-growth run came during the Reagan administration, from 1986-1990.

In September, the unemployment rate fell from 6.1% to 5.9%, the first time it’s been below 6 percent since the financial crisis in July 2008. This overall trend has been unusually steady:

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Yet in less sunny news, Friday’s report showed that over 96,000 workers dropped out of the labor force (the total pool of individuals either employed or looking for work). Because a person can’t be officially “unemployed” if they’re not actively seeking work, having a large number give up on the job search makes the unemployment rate lower – even if it is deceptively so. Critics therefore point out that the positive downward trend in the unemployment rate is partly due to the fact that so many workers are simply giving up.

The percent of working-age Americans in the labor force dropped down to only 62.7% in September, which is the lowest rate since February 1978. Of course a lot of Americans rotating out of the work force are Baby Boomers retiring, but many others are simply people who’ve lost all hope of finding a decent job.

Yet other recent trends indicate they might have reason to start hoping again – eventually. Employers have added 226,000 jobs per month, on average, all year, which is a healthy pace that actually exceeds natural population growth.

Another disappointing element of the September job report – one that has become all too familiar over past years – is wage growth itself. In fact, hourly earnings ticked down by one cent to $24.53, and are up a mere 2% over last year, barely keeping up with inflation. Moreover, the majority of new jobs added during the recovery have been low-wage jobs. And with wages effectively stagnant over several decades now, there is reason to question why the incomes of the top 1% continue to soar.

 

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Emery Reddy