U.S. Unemployment Rate: Why Aren’t There More Jobs?
Friday’s jobs report was a disappointment even though it showed unemployment falling to the lowest level since shortly after President Obama took office. The trouble is that job creation is abnormally sluggish and nowhere near enough to keep bringing down the unemployment rate.
This is hardly news, of course. For months economists have been talking about a jobless recovery. And they point to certain factors as having contributed to the problem — from the severity of the recent recession to the so-called skills gap, a shortage of workers with the training needed to fill the jobs that are available. These factors do help explain why job losses were so bad in the first place and why the unemployment rate reached 10% in 2009, the highest level since 1983. But they don’t explain why job creation continues to be so weak.
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Employment usually does lag a little bit behind the rebound in GDP that occurs after every recession. (During bad times, companies operate below capacity and, as a result, don’t have to start hiring again until growth has gone on long enough to leave them short-staffed.) But that doesn’t explain the surprising — even shocking — fact that today’s rate of new job creation remains low almost three years into the recovery.
To get back to the level of employment before the recession — replacing the jobs that were lost and also keeping up with natural growth in the workforce — would require more than 300,000 new jobs a month through 2016. In April, by contrast, there were only 115,000. And economists question whether the current U.S. economy is able to create even 150,000 jobs a month, on average — or half the number required.
There are three main reasons that this recovery isn’t generating enough jobs: