During the typical month when jobs increase by about 100,000, 5.1 million workers are hired and five million separate from their jobs, resulting in a net change of +100,000 jobs.
…more hires are needed, specifically about 5.2 million in the average month. We are just past the halfway point in getting hiring back to normal levels.
Pointer from John Cochrane.
The AS-AD story is that there is still not enough aggregate demand to stimulate enough new hires per month to overcome (new job separations per month + labor force growth + excess workers accumulated over the past six years of weak AD).
The PSST story is one of huge frictions that keep people from working in the market economy. One friction is that as technology and other factors change in the economy, the discovery process of new ventures does not keep pace. Another source of friction is government policies that reduce supply and demand in the labor market.
I doubt that there is an empirical method of distinguishing between these two stories. However, I would note that in the post-2008 period there are relatively few cases of workers getting laid off and returning to their old jobs. If there were large numbers of such cases, that would suggest that the problem of discovering new patterns of sustainable specialization and trade was relatively unimportant, and it would incline me toward the AS-AD story.