Employment In America - It's Not All It's Cracked Up To Be

We keep reading about the Federal Reserve and how it is basing its future policy decisions on the unemployment rate.  While the U3 unemployment rate is an interesting statistic, it definitely does not tell the entire story on jobs in America.  Let's look at the data behind the headline statistics to see what the real situation is for millions of Americans.  Please note that the start date for each graph is November 2007, the last month of the previous economy growth cycle since according to NBER, the Great Recession commenced in December 2007.

First, let's look at the unemployment rate:

In November 2007, the unemployment rate was an unbelievable 4.7 percent.  Four years into the recovery it sits at 7.6 percent, a rate that would have been considered extraordinarily high when looking at recessions all the way back to the one in 1981 as shown here:

Here is a look at the average duration of unemployment:

In November 2007, the average American worker was unemployed for a period of only 17.3 weeks before finding a new job opportunity.  Four years into this "recovery", an average American finds himself or herself without work for 36.9 weeks, over twice as long as before the Great Recession.  That makes the 17 week period look a lot like a brief vacation by comparison, doesn't it?

Here is a look at the number of American civilians unemployed for 27 weeks and longer:

In November 2007, 1.374 million Americans were unemployed for 27 weeks and longer.  Four years into the recovery, it sits at 4.357 million, over 3 times as many as before the Great Recession.   No matter what spin the Fed puts on this, it doesn't look good.

In closing, let's look at how hard hit one key sector of the American employment spectrum has been demolished over the past five and a half years; construction:

At the beginning of the recession, 7.49 million Americans were employed in the construction industry.  Four years into the recovery, only 5.804 million Americans are working in construction, up only 369,000 from its low of 5.435 million and down 22.5 percent from its pre-Great Recession high.  In fact, the current level of construction employment is similar to what was seen 15 years ago in the mid- to late 1990s.

And, lastly, here's a graphic showing the dropping number of government employees across the U.S.:

There is no doubt, the overall unemployment rate is looking better that it did during the nadir of the post-recession period, however, millions of Americans would agree that, despite massive experimentation by Ben Bernanke and his merry band of central bankers, things are definitely not as good as one would hope.