Friday's U.S. jobs report, which showed nonfarm payrolls increasing by a meager 142,000 jobs and the unemployment rate falling 0.1 percentage point to 6.1 percent in August, will undoubtedly rekindle a familiar debate: How much more should the Federal Reserve do to put people back to work?
Given the scant evidence of inflationary pressure and the still-woeful state of the job market, it's preferable to err on the side of doing too much.
An unemployment rate of 6.1 percent doesn't sound especially woeful -- but that's just one indicator, and it's not the most revealing. Consider, for example, how far employment among people in their prime working years remains from "normal," or the level that prevailed before the last recession.
As of August, about 76.7 percent of people aged 25 to 54 were employed, according to seasonally unadjusted data from the Bureau of Labor Statistics. That's a significant improvement over August 2011, when the employment-to-population ratio was at a low of 75 percent. But it's still about 3.9 million jobs short of 79.8 percent, the average ratio over the 10 years through 2007.
Some groups are faring better than others. For white women, the employment-to-population ratio was 70.3 percent in August -- two percentage points, or almost a million jobs, short of the pre-recession average. Black or African-American men are the worst off: At 73.7 percent, they're still 4.3 percentage points away from their pre-recession ratio of 78.1 percent, itself more than 10 percentage points lower than that of white men. (Comparable data for Asians and people of Hispanic or Latino ethnicity were not available.)
Some economists are doubtful that the Fed's stimulus efforts can get employment back up to pre-recession levels without generating too much inflation.
Their position should be held to a high standard of evidence, particularly given that there isn't much inflationary pressure visible in the available data -- including wage growth in the August jobs report.
Those who would give up on getting back to normal must accept both the suffering of millions of people and a permanent impairment of the economy's ability to generate higher living standards.