The national unemployment rate is down, wages are up slightly and the economy added 236,000 jobs last month. Everything is just fine, right?
A deeper look at the unemployment numbers exposes a jobs recovery that just isn't taking hold, compared to past recessions. This, according to a labor market analysis released by the Wells Fargo Economics Group in wake of the new national unemployment stats out this morning.
Specifically, Wells Fargo points to the large number of job vacancies, while unemployment rates remain historically high -- 7.7 percent -- three years into a recovery.
This divergence between a rising number of job vacancies and persistent high unemployment (despite today's fall in the rate) means those without jobs can't fill the job openings that do exist.
Wells Fargo suggests that this is evidence of a troubling structural challenge in the labor market. And the persistence of the growing gap between more job openings and continued high employment is markedly different from the trends of past recessions. "Today's environment has changed from the past," the Wells Fargo report concludes.
Sure, some degree of "skills mismatch" between job openings and those who are unemployed is to be expected after any recession. And certainly after one as deep as this one, the report states. But the trend lines after three years of recovery suggest that today's labor market "frictions" are much more profound than in past downturns.
And with an "historic" number of chronic unemployed still out there -- those out of work for 27 weeks or more -- their already-eroded skills will just keep declining. This means the "help wanted" signs could continue to proliferate, even as unemployment rates remain stubbornly high.
In short, a real recovery isn't just about creating more jobs. It's making sure those without jobs have the skills and ability to fill the openings being created. Unfortunately, this gap continues to yawn in the current economy, the Wells Fargo analysis suggests.
So what is your experience in the labor market? Do you think your existing skills match the available jobs out there? Why or why not?
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