Unemployment is falling, and job openings are rising. But one chart reveals just how much further the U.S. economy has to go before it truly recovers.
The big rebound
After the Bureau of Labor Statistics released its data surrounding employment in the U.S. in July last week, The Wall Street Journal reported the encouraging reality that, "July marked the first time since 1997 that employers have added 200,000 or more jobs for six consecutive months."
While the unemployment rate ticked up ever so slightly from 6.1% in June to 6.2% in July, many noted this was more a function of more Americans actively looking for job. And a glance at how significantly unemployment has fallen since the peak of unemployment shows just how much progress has been made:
Yet it doesn't stop there, as just this week the Department of Labor revealed job opening stood at 4.8 million, the highest level since February 2001. And there are now an additional 850,000 open jobs compared to this time last year.
With the economy adding more than 200,000 jobs in July, job openings standing at their highest levels in more than 13.5 years, and unemployment continuing to dip, at first glance, seemingly things couldn't be going any better for the United States economy.
But one chart reveals while much progress has been made, the U.S. still has a long way to go before improvement is truly reached.
The sobering reminder
PayScale, a company which tracks compensation data for companies across the U.S., reveals since 2006 real wages -- which factors in inflation -- has fallen by more than 8%:
It notes despite the fact surface level wages have grown by nearly 7.5% over that time, as a result of inflation -- the rising cost of the things we buy -- what Americans are actually getting paid on a comparable basis has fallen by nearly 8%.
As the company itself says, "in other words, the income for a typical worker today buys them less than it did in 2006."
In its last release PayScale noted:
Some measures experienced great wage growth (e.g., IT jobs, Oil & Gas industry, and Oil & Gas hot spots like Houston, etc.), while others had a significant fall over the year (e.g., the Miami, Legal jobs, and the Arts, Entertainment & Recreation industry, etc.)
Yet ultimately, the biggest takeaway was that even while things are improving in some areas, the fact remains the broader earnings of Americans employed in the private sector have discouragingly fallen as a result of the last economic crisis, and have stayed there ever since.
The key takeaway
At times many individuals, including myself, can see numbers like the ones first mentioned and think that all has recovered since the depths of the financial crisis five and a half years ago. But the data offered by PayScale reveals how much recovery still must be had for the U.S. to return to its levels before the financial crisis.
I would agree with Warren Buffett who said this year he's "always considered a "bet" on ever-rising U.S. prosperity to be very close to a sure thing."
But numbers like this reveal there is still much to be done before we truly recover from the financial crisis.And one can only hope it comes sooner rather than later.