ECONOMIC REPORT OF THE PRESIDENT

Figure 2-5
Private-Sector Payroll Employment, 2008–2016
Monthly Job Gain/Loss, Seasonally Adjusted
300,000
Nov-2016
100,000
-100,000
-300,000
Twelve-Month Moving
Average
-500,000
-700,000
-900,000
2008 2010 2012 2014 2016
Source: Bureau of Labor Statistics, Current Employment Statistics; CEA calculations.
of 5.3 percent earlier than most forecasters expected.8 As of March 2014,
economists generally expected the unemployment rate to remain above 5.0
percent until at least 2020 (Figure 2-6). Many economists have revised down
their estimates of the “natural” rate of unemployment as unemployment
fell to low levels without an accompanying increase in the inflation rate.
Still, given today’s low unemployment rate, further declines are expected to
moderate during 2017.
Although the overall unemployment rate was below its pre-recession
average and mirrored other indicators of labor-market strength in November
2016, some indicators of labor-market slack remained above their pre-recession
levels. For example, the long-term unemployment rate, or the share of
those unemployed for 27 weeks or more, was 1.2 percent in November 2016,
roughly its lowest point since 2008 but above its pre-recession average of 1.0
percent (Figure 2-7). If the long-term unemployment rate continues to fall
at the same pace as it has over the past year, it will reach its pre-recession
average in 2017. Looking historically across recoveries, the long-term unemployment
rate is typically among the last labor-market indicators to return
to normal (CEA 2010).
Similarly, the share of the labor force working part-time for economic
reasons (those working part-time but who would prefer full-time
8 Throughout this section, pre-recession average refers to the average from December 2001 to
December 2007.
The Year in Review and the Years Ahead | 77