Thursday, February 21, 2008

Unemployment Has Been Good Recently

The time chart below shows the U.S. unemployment rates since 1970. We are at 4.9% right now. That is low, but not as low as the 4% we had in 2000. But if you look back at the 1970s and 1980s, we are still doing well.



But, as my students know, unemployment could be low if there are alot of discouraged workers out there, people who are not looking for jobs (they have given up). They are not part of the calculation of the UE rate. But, in the graph below, the blue line is the labor force participation rate (the % of adults who are working or trying to find work). The pink line represents the % of the adult population that have a job. Although not as high as around 2000, both of these numbers are higher than for the 1970s and most of the 1980s. So alot of people are trying to find jobs and alot of them do have jobs, by historical standards.

6 comments:

Ivan Kitov said...

For obvious reasons you have to
swap curves or colors. LFPR can not be below the employment/popualtion ratio

One can check original source: http://data.bls.gov/cgi-bin/surveymost?ln


Interestingly, that if one take time derivalive of relative growth of labor force level, LFRP times (adult)population , s/he obtains a shifted and scaled UE rate curve.
the dLF/LF curve leads the UE curve by 5 years.

http://inflationusa.blogspot.com/2007/07/generalized-relationship-between.html

Cyril Morong said...

Ivan

Thanks for dropping by and catching that mistake. I simply mis-wrote it and I have changed it now.

Cyril

Ivan Kitov said...

Cyrill,

I just play with this type curves several years and wrote dozen working papers for developed countries, so got some experience.

Except the typo your message is right - the LFPR has been increasing since the 1960s . Only the last seven years we observe an opposite evolution.

Ivan Kitov said...

Just one more trick with the LFPR.
dLFPR/LFPR in the USA almost completely explains the evolution of productivity from the 1960s to present.

http://inflationusa.blogspot.com/2008/02/on-source-of-changes-in-productivity.html

Cyril Morong said...

Ivan

Thanks again for dropping by. I started this blog mainly to get discussions going with my students. How did you happen to come across it?

One of my grandfathers was from Belarus. He grew up near Minsk. He left in 1912 and died here in the US in 1975.

Cyril

Ivan Kitov said...

Cyril,

I am from Moscow, Russia. But currently work for an international organization in Vienna, Austria.

I am collecting links to economic and market blogs for my own blog by grid-search through other economic blogs. Somewhere I caught this link and checked it today. Unemployment, inflation, labor force, etc. my favorite topics.