U.S. Employment Problem: All You Need to Know

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet ) -- One of the favorite financial media activities is to report on every shred of employment data -- unemployment claims, unemployment rate changes, employment changes, etc. And then pundits guess what it means. This is nonsense. The pundits are trying to analyze "noise."

So where is the U.S. recovery? What do you really have to know? In what follows, I address this question by the use of some simple data aggregates.

The Overall Picture

Times were good in 2007. At the end of the year, the U.S. private sector employed 115.6 million people. At the depth of the recession (February 2010), 8.8 million jobs had been lost. By the end of March, 2012, the private sector had added back 4.1 million jobs. That means private sector employment is still 4.8 million lower than in 2007. More than 50% of the jobs lost have not come back.

At the end of 2007, government employment was 22.4 million. It was 22.5 million in February 2010. It fell to 22.1 million in March 2012, primarily because local governments continue to lay off workers. But overall, government employment has been stable since 2007.

Key Details on Private Sector Employment

Table 1 indicates how much employment has recovered relative to the end of 2007. While Health and Education employment are apparently recession-proof, Construction and Manufacturing were both hit very hard and have been slow to recover. In fact, employment in the Building Construction sector has fallen since February 2010, the month in which overall private sector employment bottomed out. Most of this is attributable to problems in the real estate sector where a massive inventory of unsold homes still exists (U.S. consumer debt is down, in large part because Americans are abandoning homes where mortgages exceed current values).

Table 1

Key Details on Government Employment