The last Bureau of Labor Statistics (BLS) jobs report of 2018 comes out on Friday, giving us a chance to step back and look at how working people fared over the entire year. The report also marks the 11th anniversary of the official start of the Great Recession. My expectation is that the December data will confirm that, while by some measures the economy has nearly recovered its immediate pre-Great Recession health, by other measures it is still somewhat weaker than in 2007—the last year before the Great Recession hit. Further, as I have often noted, 2007 should not be considered a benchmark for a fully healthy economy for America’s workers. Almost all labor market measures were notably weaker in 2007 than they were at the previous business cycle peak in 2000. There was very little reason to think that the U.S. economy in 2007 was at full employment. If one looks at the stronger business cycle peak of 2000 as a more appropriate benchmark, the economy in 2018 looks even further from full employment. Many working people are still not seeing the recovery reflected in their paychecks—and the economy will not be at genuine full employment until employers are consistently offering workers meaningfully higher wages.

In this blog post—and Friday when the December numbers come out—I’m going to look at average payroll employment growth over the last several years. Because there is always a bit of volatility in the monthly data—especially in the household series that has a smaller sample size—taking a year-long approach allows us to smooth out the bumps and take stock of the key measures: payroll employment growth, the unemployment rate, the employment-to-population ratio, and nominal wage growth.

The figure below shows average nonfarm employment growth for 2007–2017 and for the first 11 months of 2018. With an average of 206,000 new jobs being added each month, job growth during this time period was a bit higher than in 2017. This pickup can be attributed to the shift in federal policy from austerity to stimulus in the form of both tax cuts and an increase in government spending. In particular, Congress boosted spending by almost $300 billion, contributing significantly to economic growth in 2018.

At this pace of growth, the labor market continues to not only absorb population growth, but also chip away at the slack remaining in the labor market—namely workers who continue to be sidelined and who I expect will enter or re-enter the labor market as opportunities for jobs and better pay expand. As it turns out (and what we’ve long-argued), workers who left (or never entered) the labor force during the Great Recession and its aftermath were not necessarily permanently sidelined, but have systematically been returning to the labor market as job opportunities have strengthened. Over the last few years, the newly employed have been coming both from the ranks of the unemployed as well as from outside the labor force, those who were not actively seeking work the month prior to finding a job. In fact, as the figure below illustrates, the share of newly employed workers who did not look for work the previous month is at a historic high. Over 7-in-10 newly employed workers are coming from out of the labor force.

Further evidence of a steadily improving economy is the unemployment rate, which—after falling steadily for eight years from its peak in the fourth quarter of 2009—continued to fall through 2018 to a low of 3.7 percent in November, an average of 3.9 percent for the first 11 months of the year. It is now far below its Great Recession peak (10.0 percent), and significantly below its pre-Great Recession low of 4.4 in the spring of 2007. But despite today’s low water mark, there is still room for improvement. And evidence suggests that the unemployment rate may be overstating the strength of the labor market. The previous figure supports this claim, given that a record high share of newly employed workers are coming from out of the labor force, and are not counted in the official measure of unemployment in the previous month, despite clearly being ready and willing to work.

Furthermore, other measures show that the current unemployment rate is associated with more slack than in the past. For example, the share of “prime-age” (age 25-54) workers with jobs—the prime-age employment-to-population ratio (EPOP)—remains quite depressed relative to previous job market peaks. The prime-age EPOP has improved greatly in the recovery and is now at 79.7 percent. But, as the figure below shows, it’s still below its pre-Great Recession peak (80.3 percent) and significantly below its full employment peak of 81.9 percent. That suggests there still is ample room to pull in workers who remain idled by the economic crisis.

The last thing I’ll note about the unemployment rate is the fact that an average unemployment rate of 3.9 percent in 2018 vastly understates different experiences of the labor market. The figure below shows unemployment rates by race and ethnicity. Shown in the dark blue line, the black unemployment rate has come down significantly in the recovery, but it still is elevated at 5.9 percent. Because the roughly 2:1 ratio of black-to- white unemployment rates—historically persistent but not immutable with policy—each additional reduction in overall unemployment that can be attained actually provides disproportionate benefits to workers of color. Taking a full year average to minimize monthly fluctuations in these data, the ratio of the black-white unemployment rate between 2017 and 2018 has, in fact, narrowed slightly as the economy continued to strengthen. Given that these workers have historically faced discriminatory barriers to labor market success, this is an enormously valuable benefit of chasing full employment.

The last, but not by any stretch least, measure to watch on Friday is nominal wage growth. In November, nominal wages grew at 3.1 percent over the last year. The figure below illustrates year-over-year nominal wage growth for production/nonsupervisory workers and total private-sector nonfarm employees. Both series have seen notable gains in the last year. Total private-sector nominal wage growth average 2.8 percent in 2018 so far compared to 2.5 percent in 2017. While this is a move in the right direction, nominal wage growth remains below target levels, and certainly provides no concerns over spiraling inflation. Unfortunately, with the Federal Reserve continuing to raise rates, workers may never achieve the stronger wage growth they’ve been waiting for.

While payroll employment growth remains solid enough to keep up with population growth and absorb new and returning entrants, the prime-age EPOP and nominal wage growth continue to lag behind the more optimistic unemployment rate. I expect December’s numbers on the economy to confirm the patterns we’ve seen from this year so far. We still have a ways to go to reach the type of economy we experienced in 2000.