Employment/Population Ratio For Workers With High School Education Or Better Still At Recession Bottom

The sustained decline in the official jobless rate – now approaching the Fed’s estimate of ‘full employment’ – is a misleading indicator of labor market slack. Indeed, the stagnation in nominal wage growth is consistent with the weakness in the employment/population (E/P) ratio. That said, even the E/P ratio may be overstating the health of the jobs market.
After dropping to three-decade lows in the wake of the Great Recession, the E/P ratio, has barely improved since the fall of 2013, reversing only about one-fifth of its decline from its pre-recession highs. Furthermore – as a breakdown of the E/P ratio by education level shows -this modest improvement is illusory.

This post was published at David Stockmans Contra Corner by ECRI ‘ September 2, 2015.