The private sector of the U.S. economy has created about 8 million jobs since early 2010, for an average gain of almost 180K per month. Last month it created almost 200K jobs, and in the past year private sector job gains averaged 180K per month. Jobs growth has been relatively steady at about 2% per year for almost four years now. At the current pace, private sector employment will reach a new all-time high within the next 4-5 months. We'd all like to see even more new jobs, but it's time to stop bemoaning the sorry state of the economy. It's probably growing slower than it otherwise could, but it is definitely growing.
I prefer to focus on jobs created in the private sector, because those are the ones that really count. After all, in the last government shutdown, our own government estimated that over 20% of the federal workforce was non-essential (in some departments the number was as high as 80-90%). The first chart above compares the private sector workforce as measured by two different surveys. The magnitude of job creation in the current recovery is very similar to that of the previous recovery. The second chart above shows the monthly gain in private sector jobs; again, the record of the current recovery is very similar to that of the prior recovery.
The problem that is real and unique with this recovery is the lack of growth of the labor force (defined as those who are working and those who are looking for a job). In fact, since 2008 there has been zero growth in the labor force. Ordinarily, we would have expected to see annual growth of about 1%. From a longer term perspective, we also have the problem of the decline in the labor force participation rate, which has declined from 67% in 2000 to 63% today—about 4% of the working age population has simply "dropped out." If past trends had continued, there could have been at least 10 million more jobs created by now.
Is this the fault of the Fed? Can more Quantitative Easing entice millions more to go out and look for a job? Can more QE convince businesses to expand? I seriously doubt it.
The economy could be a lot stronger and more prosperous, but that very likely has nothing to do with monetary policy. It's time for the Fed to taper QE now and plan on reversing it as soon as possible before something goes wrong (e.g., inflation). We won't see any dramatic improvement in the economy until fiscal policy becomes more growth-oriented and less redistribution-oriented.
Despite what you might have heard repeated many times in the media, jobs growth in the current recovery has not been dominated by part-time jobs. As the chart above shows, there actually has been zero growth in part-time jobs since the last recession, and the ratio of part-time to total jobs has been falling steadily, much as it has in every recession in the past.