At this pace, the U.S. won’t get back to full employment until 2022

February 1, 2013

The jobs numbers have been crunched and re-crunched, and it turns out that the U.S. economy added an average of 181,000 jobs per month in 2012. That's a faster rate than in 2011 or 2010.

But it's also relatively sluggish, given the deep, deep hole the economy is still in. If the United States keeps adding 181,000 jobs per month, then it will take nine years and three months to get back to full employment, according to the Hamilton Project's jobs calculator:

Where does that number come from? Right now, there are 12.3 million unemployed Americans. When the economy was running at full blast at the end of 2007, there were just 7.7 million unemployed — in transition or switching between jobs, say. But on top of that, the population also keeps growing, currently adding about 88,000 new people to the labor force each month.

Put all that together, and it will take about 9 years to close the "jobs gap" — to get back to the ratio of payrolls to working-age population that prevailed back in December 2007.

With faster jobs growth, the country could get back to full employment even quicker. The Hamilton Project calculates that we could close the jobs gap entirely by the 2016 election if the economy added 321,000 jobs per month. The problem? That was the average rate for the best single year of job creation during the 1990s dot-com boom. Hard to envision now.

It's also possible to quibble with Hamilton's assumptions. Their analysis is very sensitive to how quickly the U.S. labor force will expand in the years ahead. If older Americans retire at a faster rate than expected or the population grows more slowly, then it might take even less time to get back to full employment at the current pace.

The length of time also depends on what happens to all of the country's discouraged Americans who have currently stopped looking for work altogether. If those workers start scanning ads once again and sending out résumés, that will mean the U.S. labor force will expand more rapidly. That would mean it would take even longer to close the jobs gap, since there are even more people looking for work. But it would also, paradoxically enough, be a sign of a healthier economy.

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Dylan Matthews | February 1, 2013