Unemployment is still an issue in our slowly recovering labor market but the underlying hiring trend is said to be "encouraging" by Bart van Ark, chief economist at the Conference Board. According to a June 6 article in the L.A. Times, the economy has averaged 197,000 net new jobs a month for the last year. It's not a number to boast about, but it is far better than the sharp losses faced during the recession.
Job growth improved but not keeping up with population growth
May's job growth drove total non-farm employment to 138.46 million. This surpasses the 138.37 million mark met during the peak in January 2008. While this milestone is encouraging, the problem is that from that point, the nation lost 8.7 million jobs until the labor market started to slowly grow again in February 2010. Meantime, according to Heidi Shierholz, a labor market economist at the Economic Policy Institute, population growth since January 2008 has meant that the economy still is about 6.9 million jobs short of where it should be.
Underlying hiring trend encouraging
While the labor market isn't where it should be van Ark says "The underlying hiring trend ... is encouraging, with more good news expected through the summer and into the autumn months." One of the drags on our economy in has been the lack of high paying and middle paying jobs. As a result, more people have been forced to take low paying and minimum wage jobs because they couldn't find anything else. While it is common for lower-paying jobs to lead the way out of a recession, According to Ame L. Kalleberg, a sociology professor at the University of North Carolina at Chapel Hill, "The trend accelerated during the recession." Kalleberg is the author of Good Jobs, Bad Jobs, and admits this has been a drag on the economy, because people don't have purchasing power to buy things to spur demand for products.
The good news according to Mark Zandi, chief economist at Moody's Analytics is that the number of quality jobs has improved over the last 12 to 18 months.
"Now we're seeing increasingly greater numbers of high-paying jobs being created and some middle-paying jobs. My sense is, going forward we're going to see much better-quality job creation." – Mark Zandi Moody's Analytics
In the meantime, the unemployment rate held at 6.3 percent in May, and the number of unemployed people remained unchanged at 9.8 million while the labor force participation rate remained at 62.8 percent.