Today's jobs report suggests the U.S. labor market is gradually healing the wounds left by the financial crisis of 2008. That said, we're still very far from normal.
A jobs report's headline numbers are designed to answer two questions: How many jobs did non-farm employers add in the previous month, and what percentage of the labor force was out of work? The answer to the first -- an estimated 175,000 in May, bringing the three-month average to 155,000 -- tells us that employers are adding jobs at a decent pace. The answer to the second -- 7.6 percent in May, up from 7.5 percent in April -- tells us that the labor force, which includes only those people who have jobs or are actively searching for one, increased by more than the number of people employed.
To get a better idea of where the job market stands, consider a different question: What percentage of the civilian population aged 16 to 65 is employed, and how does that compare to the pre-crisis average? This measure covers everyone, including those who have given up on finding jobs and hence are not counted in the unemployment rate. It also attempts to correct for the effects of an aging population by focusing on one age range.
As of May, the 16-to-65 employment-to-population ratio stood at 67.5 percent. That's up from 67.2 percent a year earlier, but still well below the average of 72.5 percent in the 10 years preceding the recession that began in January 2008.
In terms of jobs, as of May, the economy was 9.98 million short of the number needed to put the employment-to-population ratio back at its "normal" level of 72.5 percent. That's better than a year ago, when the number was 10.50 million, but worse than in May 2009, when it stood at 8.93 million.
In short, we have a long way to go.
(Mark Whitehouse is a member of the Bloomberg View editorial board. Follow him on Twitter.)