Friday, November 01, 2019

The percentage of 25-54 year-olds employed rose in October

One weakness of the unemployment rate is that if people drop out of the labor force they cannot be counted as an unemployed person and the unemployment rate goes down. They are no longer actively seeking work and it might be because they are discouraged workers. The lower unemployment rate can be misleading in this case. People dropping out of the labor force might indicate a weak labor market.

We could look at the employment to population ratio instead, since that includes those not in the labor force. But that includes everyone over 16 and that means that senior citizens are in the group but many of them have retired. The more that retire, the lower this ratio would be and that might be misleading. It would not necessarily mean the labor market is weak.

But we have this ratio for people age 25-54 (which also eliminates college age people who might not be looking for work)

The percentage of 25-54 year olds employed was 80.3% in October. It was 80.1% in Sept. That is the highest since January 2007).  Click here to see the BLS data. The unemployment rate was 3.6% in Oct. Click here to go to that data. The % of those 16 and older employed went from 60.96% 61.00% .

Here is a good graph from the St. Louis Fed. It shows that there are 126,277,000 people in the 25-54 year old group.

Here is the timeline graph of the percentage of 25-54 year olds employed since 2009.





Here it is going all the way back to 1948



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