Net Job Creation in the US Economy: Lessons from Monthly Data, 1950-2011

This paper studies the monthly net job creation (NJC) at the aggregate and the sectoral levels in the U.S. over the period 1950-2011. The paper has few important findings. First, NJC did not show a significant trend over the last six decades, which led to a fall in the NJC rate. Second, NJC was very volatile and it could change course even in the span of one month. Third, there was no clear pattern about the co-movement between NJC and the change in the unemployment rate. Fourth, the averages of total NJC and private NJC since late 2010 were significantly higher than their respective historical averages and the volatility in NJC since the end of the Great Recession was not unusual by historical standards. Fifth, while the evidence about the effects of the 2009 American Recovery and Reinvestment Act on employment is inconclusive, some sectors appeared to benefit from it. Finally, the most frequent drop in the unemployment rate was by 0.1 percent, and drops of more than 0.2 percent should not be highly expected.