Leading thinking

 

Stronger Job Growth*: The Recovery Of Discontent

January 11, 2016
Matt McDonald, Russ Grote, Scott Haber, Noah Reichblum


This is the recovery of discontent. We are in the midst of one of the longest periods of economic growth in American history, and the job market is close to full employment. The economy is now consistently creating hundreds of thousands of jobs per month. And yet two-thirds of Americans believe our country is on the wrong track. Over half describe the economy as "bad." 

To understand how the recent upswing in job growth might feel for the American worker, we need to put the growth in context. After all, adding 200,000 jobs in an economy of 80 million feels a lot different than adding 200,000 jobs in an economy of 160 million. But we can scale historical job numbers by the size of the workforce such that they are comparable to job numbers in 2015.

Our findings include:
 
  • With 221,000 new jobs per month, 2015 job growth was above the average of recent recoveries

  • However, if we adjust job growth to account for the increased number of workers, the average job growth per month during prior expansions since 1970 is 256,000

  • This discrepancy may be one reason why people perceive the economy as worse than statistics would indicate

  • For the presidential election, the incumbent party should aim for 185,000 jobs per month, with an average for reelected parties at 310,000 per month

 

Stronger Job Growth*: The Recovery Of Discontent