Policy Feature Issue: September Jobs Report
On Tuesday, the Bureau of Labor Statistics (BLS) released its September monthly jobs report. Though nonfarm payroll employment increased by 148,000 in September, the unemployment rate decreased only slightly to 7.2%. The September jobs report is yet another sign that our nation’s economic recovery is weak. Although overall nonfarm employment grew during the month of September, the civilian labor force grew only slightly, and labor force participation remained at its lowest point since August, 1978. As has been the case throughout 2013, the economy has shown no signs of making a significant turnaround, further contributing to the weakest recovery since World War II.
Facts You Need to Know:
- The unemployment rate remained essentially unchanged from August, decreasing slightly from 7.3 percent to 7.2 percent. The number of unemployed persons decreased slightly from 11.32 million in August to 11.26 million in September.
- Long-term Unemployment (those unemployed for more than 27 weeks) decreased slightly from 4.29 million to approximately 4.15 million Americans in the month of September.
- The Labor Force Participation Rate, which identifies the number of people who are active participants in the labor force (relative to the total population), was unchanged from August at 63.2%. The Labor Force Participation Rate remains at its lowest level in 35 years. The Employment-Population Ratio, a metric which establishes the raw employment rate, remained unchanged at 58.6%. The employment population ratio is essentially unchanged from a year ago, and is still 2 percent lower than it was when President Obama took office.
- Average hourly earnings for all employees increased by 3 cents to $24.09. In the last year, average hourly earnings have increased by 49 cents (2.1 percent).
Why Does a “Pro-Growth” Agenda Matter?
- The labor force participation rate remains at historical lows. Strong labor force participation is vital to facilitating long-term economic development. A large, engaged workforce is needed to encourage business expansion, broaden the tax base, and increase revenue. The drop in unemployment is largely artificial – a low, sustained labor force participation rate means that many Americans have simply given up looking for work.
- The employment population ratio has remained unchanged at 58.6%, and the employment population ratio has remained virtually unchanged since September, 2012 (when it was 58.7%). This demonstrates that although unemployment has been decreasing, the number of Americans outside the labor force re-engaging in the economy is not increasing. A large pool of workers is necessary to facilitate economic growth in every industry, and a pro-growth agenda will facilitate workers who wish to re-enter the workforce but have not due to a lack of available employment options.
- While the number of long-term unemployed Americans did decrease in the month of September to approximately 4.15 million, the size of the long-term unemployed population remains of serious concern. Long-term unemployed individuals run the risk of permanent detachment from the workforce, creating a further institutional barrier to economic growth.
- Despite unemployment decreasing slightly, the September jobs report does little to address the jobs gap between the current recovery and past recoveries. According to estimates from the Joint Economic Committee (JEC), private sector job growth in the current recovery stands at approximately 7.1 percent, in comparison to an 11.4 percent average for post-1960s recoveries. As a result, the jobs gap between the current recovery and post-1960s recoveries is 4.6 million. Moreover, the current recovery has created 7 million less jobs than the Reagan recovery.
- Finally, the number of working age Americans who are not participating in the labor force stood at 90.61 million people in September, an increase of 136,000 since August and 1.89 million since September, 2012. This means that for every three Americans working, two are not even looking for work. Though some of this is attributable to demographics, much is directly related to the poor job market, which suggests that the economy is still far from a full recovery.
 BLS, Historical Tables, Labor Force Participation Rate
 Source: Joint Economic Committee Estimates from the Bureau of Labor Statistics.