One of the gloomier details from Friday’s jobs report is that little progress has been made in reducing underemployment in 2016.
Although there were some signs in August that the economy is nearing full employment, underemployment hasn’t dropped in recent months, and remains well above where it settled in past recoveries.
The underemployment rate was unchanged in August, at 9.7 percent of the workforce. It has declined only one-tenth of a percentage point since last October.
Underemployment refers to people who would like to work more than they are but can’t find better jobs, in contrast to unemployment, which refers to people who are looking for jobs but can’t find them.
The Bureau of Labor statistics calculates several measures of underemployment, including one that counts the unemployment, those forced into part-time work, and those who are only sporadically looking for work. Sometimes politicians call this rate the “real” rate of unemployment, as Bernie Sanders did while seeking the Democratic presidential nomination.
The stall in recent months comes after a steady descent from above 17 percent during the worst days of the recession. And there’s no apparent reason it couldn’t go lower: it fell as low as 8 percent during the mid-2000s recovery.
Nevertheless, economists reckon that the current pace of job creation, at 232,000 over the past three months, is more than strong enough to eventually keep unemployment trending down, which should also bring underemployment with it.
