The unemployment rate has averaged 5.8% since 1948. Today’s rate of 8.3% is still well above this historical average. But to put this in perspective it’s helpful to understand just how big of a rut we are still in. A nice new tool available at the Atlanta Fed website shows us how many jobs it takes to get back to a certain unemployment rate. Amazingly, it would take roughly 200,000 new jobs every single month to get us back to 5.8% by March 2015!
Since the job market bottomed in 2010 we’ve averaged 137K monthly new jobs. Since 1939 when the non-farm payrolls data was first tracked, the US economy has averaged monthly gains of 116K (including recessions). The 2003-2008 recovery averaged a monthly gain of 146K.
The moral of the story….Don’t expect a booming economy any time soon unless we see some sort of miraculous gain in employment….And certainly don’t expect to see the unemployment rate anywhere near the historical average any time soon….