You've probably read recently that businesses have begun hiring again. That isn't quite right: firms had been hiring throughout the recession. Unfortunately, their firings outnumbered their hires so unemployment climbed. Their hiring did slow down, however, a lot. In 2006, over 5 million workers were hired per month, on average. In 2009, that number shrunk to average less than 3.5 million. But the labor market recovery began in 2010. How does the picture look now?
Here's the chart for private sector hiring updated through March, based on a report released today from the Bureau of Labor Statistics:
As you can see, hiring isn't exactly flourishing just yet. In March, new hires rose to 3.78 million. That happens to be the most since December 2008, but this isn't saying much. As mentioned, in 2006, when the economy was humming, 5 million hires per month was normal. And that wasn't a recovery, just normal business. In a recovery, you would expect hiring to be even more aggressive than usual.
How weak is hiring following the latest recession? Let's compare it to the one in 2002/2003. You can see hiring for that period above as well. At no point did it fall below 4 million, and it quickly began to rise back to levels above 4.5 million when unemployment peaked at 6.3% in mid-2003. This time around, unemployment peaked in late-2009, but hiring has barely ticked up since.
The prolonged rate of very low rate of hiring shows how weak the labor market remains. Layoffs have certainly slowed down, but hiring hasn't picked up to create enough new jobs to quickly whittle down the still-high unemployment rate. Once hiring regularly hits 5 million workers per month again, we can really declare that the labor market is back to normal. It has a long way to go.
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