Chad Stone is chief economist at the Center on Budget and Policy Priorities.
The government's monthly jobs report contains some of the most timely and important indicators of how the economy is doing. When you combine the tepid economic recovery with a presidential election, you can easily understand why last Friday's jobs report received so much attention and why the upcoming October and November reports will get at least as much.
Here are some things worth knowing, and charts worth viewing, if you're trying to keep score at home on how the economy is doing or who to believe among the politicians and pundits who put their own spin on the numbers.
For starters, the key headline numbers come from two different surveys. The unemployment rate comes from a survey asking people if they are working or looking for work. People with a job are classified as "employed;" people who don't have a job but have been actively looking for one are classified as "unemployed;"and people who don't have a job and have not looked for one in the past four weeks are classified as "out of the labor force." The number of jobs created or lost comes from a separate survey that asks private and government employers how many jobs they have on their payrolls.
With that as background, here are three charts that we at Center on Budget and Policy Priorities publish each month to keep the latest employment report in perspective. We have even more charts available in this chartbook.
The first chart below shows the monthly change in payroll employment since the Great Recession began in December 2007. The bars show the change in total (private plus government) employment, and the line shows the change in private employment. The changes in total employment are distorted in early 2010 by the Census Bureau's temporary hiring to conduct the Census and the subsequent end to those Census jobs.
The second chart shows how the extraordinary monthly job losses in the worst part of the recession translated into a cumulative jobs deficit that was much larger than in the three previous recessions. A slow and steady two-and-a-half-year jobs recovery, which was strong enough to climb out of a relatively shallow hole from the 2001 recession, has made only a dent in the much larger jobs deficit from the Great Recession.
The final chart compares the path of unemployment in each of the past four recessions and subsequent recoveries. The large increase in the unemployment rate in the latest recession was similar to that in the 1981-82 recession, while the subsequent slow decline is similar to that in the "jobless recoveries" from the 1990-91 and 2001 recessions rather than the relatively rapid recovery from the 1981-82 recession.
These charts don’t settle political debates about why the recession was so deep and whether a different set of policies could have produced a different outcome. But they should remind us that we must do much more to restore the jobs market to good health.