Great Recession, great recovery? Trends from the Current Population Survey

Abstract

It has now been a decade since the start of the Great Recession—the most severe economic downturn in the United States since the Great Depression.1 In a 2-year span starting in December 2007, the unemployment rate rose sharply, from about 5 percent to 10 percent. In late 2009, more than 15 million people were unemployed. Total employment, as measured by the Current Population Survey (CPS),2 dropped by 8.6 million, or almost 6 percent. In 2010, however, the U.S. economy and labor market began to recover. By December 2017, the unemployment rate had fallen to 4.1 percent. Employment had grown by 16.0 million, reaching a level about 5 percent higher than that in November 2007. However, not all U.S. labor market indicators had returned to their pre-Great Recession levels. The number of long-term unemployed, especially those who had been jobless for a year or more, remained elevated. The ranks of those working part time involuntarily were still sizable. In addition, long-term trends, such as the decline in labor force participation, continued throughout the recession and recovery. This article uses CPS data on unemployment, labor underutilization, labor force participation, employment, and earnings to analyze how the U.S. labor market has recovered from the Great Recession.