Optimism is trending in real estate circles. On the conference circuit, there's talk of rising prices, easier access to financing, and higher rents. Lending standards are easing. Lending volume is growing faster than borrower quality is improving. We've moved from recovery to expansion.

What's behind the bullish assessments and tilt in risk-taking? Artificially low interest rates and investor and lender competition have certainly aided in recouping lost property value; that process is largely complete for top tier assets in prime metros. In the arena of property fundamentals, however, it's not a demand-driven recovery. The tally of occupied office and industrial space is slowly returning to its pre-crisis peak, so our buildings are no doubt feeling more full. But that doesn't reflect momentum in job growth as much as a slow recovery of lost jobs and an absence of significant new construction. While sentiment and perceptions are shifting, the job market remains a weakest link in the recovery, constraining the medium-term outlook.

Here's the good news and the basis for much of the “stronger job market” argument. We've recovered most of what we've lost, at least in terms of the raw counts:

But the market still lacks observable momentum. In fact, monthly average payroll employment gains during the second half of 2013 (+169.5k) was slower than during the first half (+194.8k):

We haven't been creating jobs as fast as we're adding people, though the gap is narrowing:

Hiring activity is up but still looks like the worst days of the previous recession and the “jobless recovery” that followed:

All of this means the share of Americans that are working has flatlined at its lowest level in roughly thirty years. This ratio of working to non-working Americans reflects a structural problem, not just a cyclical one that will correct itself in time:

For now, a relatively smaller tax base covers our costs. Unemployment insurance payments have come down as some have found work and others have seen their benefits expire. Apart from secondary effects, the bill is still higher in nominal terms than at any previous recessions' peak:

For the long-term unemployed who may be mismatched in terms of location or skillset or unemployed for some other reason, the likelihood of reentering the workforce declines with unemployment duration.

This is a picture of a labor market recovery in progress, where current conditions are still unlike any we had seen before the crisis; not a mission accomplished by any means: