Dating bad economy
Private employment rose by 252,000 in October, federal government employment rose by 5,000, state employment rose by 2,000, and local employment rose by 2,000.
In the third quarter of 2017, the demand for goods and services (actual GDP) was roughly billion (about 0.2 percent) greater than the Congressional Budget Office (CBO)’s estimate of what the economy was capable of supplying (potential GDP).
The Labor Department's most comprehensive alternative unemployment rate measure — which includes people who want to work but are discouraged from looking and people working part time because they can't find full-time jobs — recorded its highest reading on record in November 2009 in data that go back to 1994. The last time it was this low was December 2006, a year before the Great Recession, but this rate is still nearly a percentage point higher than it was in 2000.
Average hourly earnings of employees on private payrolls grew modestly through much of the recovery, and to date have averaged 2.2 percent annually.
This suggests that the output gap between actual and potential GDP, which was manifested in excess unemployment and underemployment and idle productive capacity among businesses, has essentially closed.
However, CBO’s estimate predated the annual updating of GDP data that took place in July.
That rate has edged down over the past year and was 1.0 percent in October.
In October, however, the labor force participation rate was 62.7 percent, 0.1 percentage points below its average rate in 2016; the employment-to-population ratio was 60.2 percent, 0.5 percentage points above its average rate in 2016.In its June 2017 , issued before the July GDP revisions, CBO projected that the gap between actual and potential GDP would close in 2018.CBO does not try to forecast business-cycle fluctuations, but instead assumes that real GDP growth will reflect underlying trends in the economy’s capacity to produce goods and services and that after 2020, actual GDP will be 0.5 percentage points lower than potential GDP, which is roughly the average historical gap. Progress erasing the jobs deficit was slow for some time, but the economy has now recovered the 8.7 million jobs lost between the start of the recession in December 2007 and early 2010 and continued to add jobs since.Job creation has averaged 167,000 a month over the past 12 months and 162,000 over the past three months.
The latter figure is well above what’s required to keep up with potential labor force growth (the pace of job creation that’s appropriate once the economy is back to full health).
Long term unemployment reached much higher levels and persisted much longer in the Great Recession and subsequent jobs slump than in any previous period in data that go back to the late 1940s.