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Economic Growth

Inequality

Workers

What Does the Recovery Really Look Like?

In October of 2009, the national unemployment rate peaked at 10 percent; as of December 2016, it was down to 4.7 percent. The Federal Reserve Board voted last month to raise interest rates in part due to this low rate, and the decrease in unemployment has generally been hailed as a sign of recovery. But how accurately do those numbers reflect the current employment situation for most workers? This post looks at prime-age employment rates for several different demographic groups to create a clearer picture of how the recession and recovery affected American workers.

The unemployment rate only includes workers who have been actively seeking jobs during the last four weeks. However, due to the severity and duration of the most recent recession, many prospective workers simply gave up looking and were not counted in the unemployment rate. To account for these “missing workers”, this post analyzes the employment rate instead of the unemployment rate. By using the prime-age employment rate – the employment rate for workers ages 25 to 54 – it avoids any bias attributable to the aging of the population.

CEPR, Nicolas Buffie and Sarah Rawlins / January 26, 2017