Are We Recovering?

The new normal is revealed in two graphs.   The first graph is the employment ratio comparing number employed to the total population. It dropped in the great recession and has steadied out 58.6%. This drop has not recovered despite the "unemployment rate" dropping.  This is the lowest ratio since 1983.

Next is the labor force participation rate, the number of persons who are employed in some way or seeking employment.  It has hit its lowest mark since 1980 at 63.5%. Essentially, the economy has given back all its gains since the Reagan era. 

The steady numbers for employment ratio combined with the drop in labor force participation rate explains the falling unemployment rate.  It's not good news.  The economy may be growing, but 1.6% growth for 2012 isn't that great for what should be a recovering economy.