It’s year end and time for some perspective on the economy.
Let’s start with the U.S. labor market.
The employment to population ratio remains stuck at around 58.7 percent, levels not seen since the mid-1980′s. This is due to both structural factors, such as demographics and an increase in the population on disability, as well as cyclical influences.
Nonfarm payrolls have grown, on average, 154K per month in the first 11 months of 2012, down from 175K per month, last year.
The private sector has recovered about 58 percent of the 8.833 million jobs lost during the Great Recession. The goods producing sector, mainly, construction and manufacturing sectors, were hit disproportionately hard and have yet to fully recover. Construction, for example, is operating at only 74 percent of December 2007 levels. Hopes are high for construction hiring as the U.S. housing market recovers.
Conversely, the private service producing sector has fully recovered though with a much different profile and, unfortunately, in lower wage industries.
Source: Joint Economic Committee, U.S. Congress
(click here if charts are not observable)