The August jobs report reveals the unemployment rate edged lower to 8.1 percent, from 8.3 percent. It comes with great disappointment because the unemployment rate dropped as eligible workers left the labor force. Coming on the heels of the two major parties’ conventions, the political stakes are high when it comes to these numbers.
Poll after poll show that voters are most concerned with the economy and the jobs markets and there are only two more monthly Labor Department reports due before the general election.
No president since the Great Depression has won re-election when the jobless rate was higher than 7.4 percent, the level at which Ronald Reagan won a landslide reelection in 1984. Given the current pace of job creation this year (139,000 jobs per month), the unemployment rate will likely remain above 8 percent by Election Day and probably by the end of the year as well.
During the past two weeks, the parties have released dueling narratives of the jobs situation: Republicans claim that progress is too slow and Democrats say that while the improvement may not be ideal, the damage was too vast to be repaired in a normal time frame. Who’s right?
There is no doubt that the country has seen gains in the jobs crisis: The economy has added 3.8 million jobs since employment bottomed in February 2010. (4.3 million private jobs created were offset by just over a half a million government jobs lost). But the hole is deep: There are still 4.8 million fewer total non-farm jobs since before the recession started.
It’s the same story with the unemployment rate: It’s down from over 10 percent only a couple years ago, but has remained above 8 percent for over three years, the longest stretch since monthly records began in 1948. Just before the beginning of the recession, the rate was 5 percent and at the current rate of job creation, it will take approximately 3 to 4 years to return to that level.