(Bloomberg) -- Eight years after the end of the last recession, the U.S. economy has by another measure returned to employment levels from before the downturn.
The better-than-estimated 209,000 payroll gain in July was more than enough to close what the Hamilton Project calls the “jobs gap.” The measure, which adjusts for growth and aging of the population, accounts for total employment and what’s needed to absorb the number of new labor-market entrants, according to the economics offshoot of the Brookings Institution.
“It’s sort of a mark of healing of the labor market,” said Diane Whitmore Schanzenbach, the outgoing director of the Hamilton Project. “That doesn’t mean we’re at full employment or anything like that, and I think everybody’s worried about wage growth, but this is one marker of healing.”
The Hamilton Project’s measure is an attempt to parse how much the labor market has improved cyclically.
While it took eight years for the jobs gap to close in this expansion, it never did in the previous one that began in 2001. Because the employment-to-population ratio was turning lower before the last recession that started in December 2007, there was a lower hurdle to clear this time around, the project’s authors wrote.
With the July payrolls gain, employment in 2017 has averaged 184,000, in line with 187,000 last year. At the same time, wage growth has remained sluggish, rising at a 2.5 percent year-on-year rate in July that matches the average of the past two years.