Thursday, September 13, 2012

Jared Bernstein is a little too rosy on the job market

For some reason my comment didn't get posted for this post from Jared Bernstein, but it looks like most of the commenters picked up on exactly the same thing. Jared writes: "Anyone who doesn't think the job market is improving needs to explain this clear trend.  It’s the “musical chairs” graph from the BLS showing the number of unemployed persons per job opening.

A few years ago, it peaked just below seven; now it’s around 3.5.   That’s still well above pre-recession levels but like I always say–folksy economist that I am: you can’t get where you need to be if you ain’t movin’ in the right direction."

He shows this graph:

I had said that this would be a lot more encouraing to me if the labor force participation rate from 2009 on didn't show the same trend.

There are a lot of labor market indicators to look at, but employment to population ratio is really the best if you're actually interested in how many workers the economy is capable of employing.

I'm still voting for Obama in November - in a swing state no less - but I ain't voting for him because the labor market has vastly improved. I'm voting for him because no improvement is better than what I'd expect to see under a President Romney or a President Johnson (unless of course we're talking Lyndon... he'd be pretty good).

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