151,000 payroll jobs were added in October and while this is certainly good news, it does little to impact the 9.6% unemployment rate. If the economy continues to add jobs at this anemic pace, it would take 8 years (97 months) to put nearly 15 million unemployed Americans back to work. 6.2 of the 8 million workers that lost their job during the past recession have been unemployed for more than 26 weeks and still want a job. Another sobering fact - the economy needs to add at least 100,000 jobs per month just to keep up with population growth.
The Employment-Population ratio, the ratio of employed Americans to the adult population declined to 58.3% in October from 58.5% in September. While this may seem like a slight drop, consider that in 2007 the ratio was 63 percent. But here's the part that scares the living daylights out of most economists that I speak with - We've had 12 recessions since WWII and in all but one, the graph depicting the percentage job losses relative to peak employment pr- recession looks seriously out of whack.
Many policymakers may not want to admit it but it appears that the "add gas, go faster; less gas, go slower" relationship may now be seriously malfunctioning. A year ago, Time Magazine's Joshua Cooper Ramo wrote a brilliant piece on Okun's Law. And yesterday, CNBC's John Carney wrote a short article highlighting a breakdown in another important labour market relationship.
Article 1 -Percentage Job Losses in Post WWII Recessions
Article 2 - http://www.time.com/time/business/article/0,8599,1921439,00.html
Article 3 - What's Really Driving Unemployment?
