The Great Recession technically ended in the summer of 2009 after the U.S. gross domestic product rebounded from bottom-levels and started to expand. However, to any American not looking at the textbook definition, the recession is still being felt across the country.
According to a new report from the U.S. Census Bureau, millions of households are struggling in the wake of the financial crisis. Real median household income in 2012 totaled $51,017, down slightly from $51,100 in 2011. Incomes have now declined for three consecutive years, and remain 8.3 percent below 2007 levels, the year before the nation entered the worst financial downturn since the Great Depression. Furthermore, the nation’s official poverty rate last year was 15 percent, representing 46.5 million people living at or below the poverty line. That is 2.5 percent higher than in 2007.
Despite a rebound in the stock market, the employment situation in America remains weak. Employers added 169,000 jobs in August and the unemployment rate continued to decline — but the bigger picture is concerning.
10. Unemployment Rates
The headline unemployment rate declined to 7.3 percent last month — its best level since December 2008. That is below the peak of 10 percent in 2009, but the rate has now remained above 7 percent for 57 consecutive months.
Additionally, the U-6 unemployment rate, which includes everyone in the headline rate — plus people who are employed part-time but prefer a full-time position, or want work but have stopped looking — remains stubbornly high at 13.7 percent.
9. Part-Time Workers
The number of people employed part-time because of economic reasons is nearly 8 million. These individuals had their hours slashed or were unable to find a full-time job. They are also one reason for the high U-6 unemployment rate.
The backbone of the U.S. economy and employment used to be manufacturing, but this is clearly no longer the case. The manufacturing sector has been bleeding jobs for decades. The number of employees in the manufacturing sector is near its lowest point since 1946. Over the past decade, more than 2.6 million manufacturing jobs have been destroyed.
7. Employment-to-Population Ratio
Despite the decline in the headline unemployment rate over recent years, the percentage of working-age Americans with a job is under 59 percent, its lowest level since 1983. This ratio will have difficulty improving. The adult population increases by about 200,000 people each month, but the economy has averaged a monthly gain of only 184,000 jobs over the past 12 months.
A growing number of analysts and economists are beginning to realize a quality issue with the jobs being created. Leisure and hospitality employment increased by 21,000 jobs last month. Retail jobs — another low-wage industry — added 44,000 jobs in August. Over the past year, these two industries are responsible for 747,000 new jobs.
Wages and salaries as a percentage of GDP have been declining for over four decades. According to data from the U.S. Bureau of Labor Statistics, employees in seven of the 10 largest occupations typically earn less than $30,000 a year. A retail salesperson — the most popular occupation — earned an average of only $25,310 last year.
4. Job Hunt
Financial advisors often advocate an emergency savings fund of around eight months. The simple reason for this is that it takes the average unemployed person about 37 weeks to find a new job. That is below the high of 41 weeks seen in recent years, but well above historical standards.
3. Hours Worked
The typical work week has also seen a dramatic change over the decades. The average amount of annual time worked per employed person in the U.S. has declined from 1,900 hours in 1970 to about 1,760 hours in 2011.
2. Labor Force
A large catalyst for the declining headline unemployment is due to job hunters dropping out of the labor force. The share of working-age Americans who were employed or looking for work fell to 63.2 percent last month, its lowest level since 1978 — a time when fewer women were participating in the labor force.
1. Long-Term Unemployment
In August, the total number of unemployed persons remained little changed at 11.3 million while the number of long-term unemployed, those jobless for 27 weeks or more, was about 4.3 million. Those individuals constitute 37.9 percent of the unemployed, and their numbers have shrunk by just 733,000 in the past 12 months.
Here’s how the major U.S. indexes traded on Wednesday:
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