Understanding the Anemic Jobs Recovery
According to the latest jobs report, released this morning, the unemployment rate plunged to 6.7 percent, from 7.0 percent in November, but the number of Americans with a job increased by only 74,000. Here's a deeper look at other jobs data:
Unemployment insurance filings are at the lowest level in years -- a level normally associated with a vibrant economy. But the unemployment rate remains far higher than at any point since the early 1990s. Normally, unemployment insurance filings closely track the unemployment rate.
The reason for this is that insurance claims track the difference between hirings and firings. During the recession hiring collapsed and layoffs spiked, so initial claims soared. Employers quickly stopped shedding workers but haven't picked up the pace of new hires.
So the number of people unemployed for less than 15 weeks is basically the same as it was before the recession…. By contrast, the number of people employed for 15 weeks or more is about 2.6 times what it was at the end of 2007.
That's why the average unemployed person has been out of work for longer than anyone since the end of World War II.
(Matthew C. Klein is a writer for Bloomberg View. Follow him on Twitter.)