In contrast to the better-known unemployment rate, which measures the percentage of working-age Americans who are actively seeking jobs but do not have one, the civilian employment-population ratio measures the percentage of working-age Americans who have a job, whether they are seeking one or not.
This distinction matters because the state of an economy affects whether someone looks for a job at all. Bad times discourage potential workers from seeking jobs; boom times encourage marginal workers to seek them. As our population grows, we have more working-age adults who need work. A growing economy needs to replace the jobs we have lost and add new ones to accommodate these added potential workers.
The following graph describes the bleak employment outlook. The drop in employment during the 2007 downturn has been unprecedented. The employment ratio has fallen from the 63% pre-crisis level to 58.5%, and it has constantly been declining during the last three months, at the time that the unemployment rate has remained constant at 9.5%. No other time in the history has seen such a steep decline in employment.
