Forget the Unemployment Rate—People Still Don't Have Jobs

The bad news in Friday’s jobs report was that, despite the decline in the unemployment rate to 6.7 percent, the economy created only 74,000 jobs last month. The unemployment rate fell because people are leaving the labor force. So the unemployment rate is a misleading indicator of the relative health of the labor market—it’s much worse than it looks. Here’s a much better glimpse of how weak the recovery has been:

Data: Bloomberg

The chart above, from my Bloomberg News colleague Mike Dorning, shows the percentage of 25- to 54-year-olds (prime working-age adults) who have a full- or part-time job. As you can see, it fell off a cliff during the Great Recession. And five years later it has barely budged. This is one reason why it’s still too early to end federal emergency unemployment compensation.

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