Nearly half of the population is still out of a job showing just how far the U.S. labor market has to heal in the wake of the coronavirus.
The employment-population ratio — the number of employed people as a percentage of the U.S. adult population — plunged to 52.8% in May, meaning 47.2% of Americans are jobless, according to Bureau of Labor Statistics.
As the coronavirus-induced shutdowns tore through the labor market, the share of population employed dropped sharply from a recent high of 61.2% in January, farther away from a post-war record of 64.7% in 2000.
This ratio is a broader look at the employment picture.
It takes into account adults not in the labor force and captures those who were discouraged about the prospects of finding a job, whereas the unemployment rate looks at people actively looking for a job.
“To get the employment-to-population ratio back to where it was at its peak in 2000 we need to create 30 million jobs,” Torsten Slok, Deutsche Bank’s chief economist, said in an email. Slok included the chart in a report to clients.
Investors will look to this week’s June jobs report for an update on the pace of the labor market recovery. Economists polled by Dow Jones are expecting nonfarm payroll to increase by 3.15 million in June, after a shocking surge of 2.5 million in May, the biggest jobs increase ever in a single month.
Meanwhile, the jobless rate is expected to decline to 12.4% this month from 13.3% in May, according to Dow Jones. The unemployment rate doesn’t capture those who stopped looking for a job. The labor force is about 60% of the U.S. adult population.