Council of Economic Advisers Blog

  • The Employment Situation in August

    Over the last four years, we’ve cleared away the rubble from the financial crisis and begun to lay a new foundation for stronger, more durable economic growth. With continued solid job gains, today’s employment report is another sign of progress, but we must continue to pursue policies that move our economy forward and restore middle class security.  

    Five Key Points in Today’s Report from the Bureau of Labor Statistics

    1. Private sector employment has risen for 42 consecutive months, with businesses adding a total of 7.5 million jobs over that period. Today we learned that total non-farm payroll employment rose by 169,000 in August, with the private sector accounting for 152,000 of that gain. Private sector job growth was revised down for June (to 194,000) and July (to 127,000), so that over the past three months, private sector employment has risen by an average of 158,000 per month. The monthly change is shown below. 

    august private sector job growth


    2. The overall unemployment rate ticked down 0.1 percentage point to 7.3 percent, the lowest since December 2008, with long-term unemployment remaining elevated. Although the unemployment rate remains too high, it has been trending down steadily since late 2009. The lingering elevation in the unemployment rate primarily reflects a large number of long-term unemployed (those unemployed for more than 27 weeks), while the share of the labor force that has been unemployed for less than 27 weeks has mostly returned to its average during the 2001-07 expansion period. That's why the administration continues to push for measures to spur job creation now and put the long term unemployed back to work.

    august unemployment rate


    3. The economy has been consistently adding jobs at a pace of more than 2 million per year. Over the twelve months ending August 2013, total non-farm payroll employment rose by 2.2 million, similar to the gain in the year-earlier period. While the month-to-month figures can be volatile, the year-over-year changes indicate that the recovery has been durable in the face of several headwinds that have emerged in recent years. The separate household survey is more volatile month-to-month, but over a longer period, it tells the same story. When adjusted by the Bureau of Labor Statistics to be comparable to the concept of employment used in the payroll measure, household employment has risen by 2.4 million over the twelve months ending August 2013.  

    year over year change in employment


    4. CEA estimates that if state and local government employment had held steady during the recovery, the unemployment rate would currently be below 7 percent. Unlike previous recoveries in which state and local government employment- like teachers, fire fighters and first responders-- expanded, public payrolls have declined in the current recovery (see chart). During the current 42-month consecutive streak of increasing private sector employment, state and local government employment has fallen by 507,000, including the loss of 267,000 education positions. 

    state and local government employment during recession


    5. The number of persons working part-time for involuntary “economic reasons” has fallen by 152,000 over the past twelve months. Budget cuts due to sequestration led to an increase of 77,000 in the number of federal government employees at work part-time for economic reasons, so the number of persons part-time for economic reasons in private sector and non-federal government positions is down by an even larger 229,000 (see chart, based on not seasonally adjusted data). Measures of part-time employment can be volatile month-to-month, but the seasonally-adjusted 334,000 drop in persons working part-time for economic reasons in August almost entirely reversed the increase over the preceding two months. 

     year over year change in persons working part time for economic reasons


    As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.  Nevertheless, incoming economic data broadly suggest that the recovery continues to make progress. It is therefore essential that policymakers avoid “self-inflicted wounds” that could derail the recovery and stay focused on policies that will help sustain and boost the pace of job creation. 


    Jason Furman is Chairman of the Council of Economic Advisers.

  • The Employment Situation in June

    While more work remains to be done, today’s employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class, as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007. 

    Today’s report from the Bureau of Labor Statistics (BLS) indicates that private sector businesses added 202,000 jobs last month (see first chart below). Total non-farm payroll employment rose by 195,000 jobs in June. The economy has now added private sector jobs for 40 consecutive months, and a total of 7.2 million jobs has been added over that period. In spite of monthly volatility, over the past three years the pace of job growth has increased each year (see second chart below). So far this year, 1.23 million private sector jobs have been added.

    The household survey showed that the unemployment rate remained at 7.6 percent in June down from 8.2 percent a year ago. The labor force participation rate rose by 0.1 percentage point for the second month in a row to 63.5 percent in June.

    In the four years since the recession ended in June 2009, the economy has added 5.3 million jobs, thanks to the resilience of the American people and policies like the Recovery Act, which helped bring the recession to an end and put us on the path to recovery. With the recovery gaining traction, now is not the time for Washington to impose self-inflicted wounds on the economy. The President will continue to press Congress to act on the proposals he called for in his State of the Union address to make America a magnet for good jobs, help workers obtain the skills they need for those jobs, and make sure that honest work leads to a decent living.

  • Rock and Roll, Economics, and Rebuilding the Middle Class

    Today, at 7:00 pm EST, Chairman of the Council of Economic Advisers Alan Krueger will deliver remarks on income inequality and rebuilding the middle class at the Rock and Roll Hall of Fame.

    As he'll discuss this evening, using rock and roll industry as a example is one of the best ways to explain economics -- many of the forces that are buffeting the U.S. economy can be understood in the context of the music industry.

  • The Employment Situation in May

    While more work remains to be done, today’s employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class, as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007.

    Today’s report from the Bureau of Labor Statistics (BLS) indicates that private sector businesses added 178,000 jobs last month. Total non-farm payroll employment rose by 175,000 jobs in May.  The economy has now added private sector jobs every month for 39 straight months, and a total of 6.9 million jobs has been added over that period. So far this year, 972,000 private sector jobs have been added.

    The household survey showed that the unemployment rate ticked up to 7.6 percent in May from 7.5 percent in April. However, the labor force participation rate also rose by 0.1 percentage point to 63.4 percent in May, as 182,000 more unemployed workers reentered the labor force in May than in April, a sign that more workers felt encouraged to search for a job.

  • The Employment Situation in April

    While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class, as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007.

    Today’s report from the Bureau of Labor Statistics (BLS) shows that private sector businesses added 176,000 jobs last month. Total non-farm payroll employment rose by 165,000 jobs in April. The February and March employment estimates were revised up by a total of 114,000 jobs. The economy has now added private sector jobs every month for 38 straight months, and a total of 6.8 million jobs has been added over that period.  Over 800,000 private sector jobs have been added over the last four months.

    The household survey showed that the unemployment rate edged down from 7.6 percent in March to 7.5 percent in April, the lowest rate since December 2008. The labor force participation rate was unchanged at 63.3 percent in April.

  • Chairman Alan Krueger Addresses “Fairness as an Economic Force” before a Conference at Oberlin College

    On April 26, 2013, President Obama’s Chairman of the Council of Economic Advisers, Alan B. Krueger, delivered remarks on “Fairness as an Economic Force” at a conference on “Learning and Labor Economics” at Oberlin College in Oberlin, Ohio.

    Read Chairman Krueger’s Remarks HERE

    Read the excerpts of Chairman Krueger’s remarks HERE