With the addition of 217,000 new jobs in May, the number of working Americans has finally exceeded the pre-recession peak of 138.4 million workers set in January of 2008. The job pace was slightly above analysts’ expectations, but the unemployment rate remained at 6.3%.
Despite the hoopla about a new record for jobs, the “recovery” is really about the 11 million U.S. population growth and about 4.7 million seniors that are postponing retirement. It would still take another 7.2 million jobs for a real recovery.
There have been 8 recessions in the last sixty years. The economy last peaked in January of 2008 and bottomed in March of 2009. History used to tell us that brief periods of economic contraction are not uncommon, and then the economy moves to new record levels. But it took an extraordinary 62 months to just get back to the number of people working in 2008.
Of the big four economic indicators, the 2008 to 2009 recession was the worst for unemployment, personal income, and industrial production; it was the second worst for retail sales. All the indicators have now hit new highs, except personal income is still down by about 2%.
Since the January 2008 peak of employment, the population of the United States grew by about 11 million people. At the prior peak, approximately 45.7% of Americans had a job, but just 44.1% have a job today. Most demographers excuse this unusual shrinking percent of Americans working on the retirement of the 1946 to 1964 baby boomers.
It is true that about 10,000 people each day are now turning 65-years old. But baby boomers are not retiring like prior generations. Since 2009, the average age of U.S. retirement has risen from 60 to 62. That means another 4.8 million seniors are still in the work force. Consequently, the 45.7% of Americans working in 2008 compares to an equivalent 42.6% today.
The U.S. public is not being fooled by all the hoopla about a new peak in employment. CNN Money’s “American Dream Poll” just reported that 61% of Americans believe it will take three more years for the economy to recover and 27% of Americans believe the economy is still in a downturn.
The American public viscerally understands that this time the economy is different. After the growth of population and increase in retiree age employment; there are still about 7.2 million Americans that have been left behind from the supposed job recovery.
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