The percentage of 25-54 year-olds employed fell in October 0.4 percentage points after falling 0.1 percentage points in September-How has the economy done in the past after a sequence like that?

There have not been many sequences of a 0.1 fall followed by a 0.4 fall, so I also looked at cases when a 0.3 decline was preceded by either a 0.1 or 0.2 fall. Since 1948 there have been 8 cases and generally the economy has not done well after any of them (this is related to the previous post which has a link to the BLS data). 

But one caveat is that things tended to be declining over the prior 6 months for each case. So it makes sense that the economy might keep declining or be sluggish afterwards. The two month sequence I look at might not tell the whole story.

The table below presents the data. Take the Dec.-Nov. 1981 case. It fell 0.1 in Nov. and then 0.4 in Dec. This is indicated in the "Change" column.

The "Previous Month's %" shows 74.5, meaning that 74.5% of 25-54 year-olds were employed in Oct. of 1981. It took 23 months until we got back to at least 74.5% and in the mean time, it fell to as low as 72.6% (the "Lowest intervening % column).

But over the previous 6 months it had gone down 0.6 (see the last column of the table). So the economy was already weak. In 6 of the 8 cases it did go down over the 6 preceding months.

In the two cases when it went up over the previous 6 months, things were still not good afterwards. In the March-April 1980 case it took 14 months to recover with drop of 1.1 from the starting point to the lowest point.

In the July-Aug 1959 case, it took 10 months to recover with maximum decrease of 0.9 (and the economy had been doing well in the previous 6 months with the % of 25-54 year-olds employed going up 1.0).

The Oct-Nov 1974 case saw previous 6 month decline of just 0.1. So things were really not too bad in the run up yet recovery still took 23 months and the decline from the starting point was 1.9.

So there is some cause for concern. But our current case was preceded by a six month gain of 0.8. So maybe that indicates some underlying strength that some of the earlier cases did not have (although, again, look at the 1959 case when it went up 1.0 over the previous 6 months).

Of course, each case might have unique features or variables that make any projections for the current case difficult.

One thing to remember is that we have not recovered from the Covid decline. It was 80.5% before Covid and got up to 80.3% before falling to 79.8% with the declines the last two months (the Covid low was 69.6%). It is disappointing to get close to full recovery only to start falling back.

Month/Year	Change	Previous Month's %	Months to equal or exceed	Lowest Intervening %	Previous 6 Month Change
2022 Oct	-0.4
2022 Sept	-0.1	80.3	?	?	0.8
1981 Dec	-0.4
1981 Nov	-0.1	74.5	23	72.6	-0.6
1959 Aug	-0.4
1959 July	-0.1	66.1	10	65.2	1.0
2001 Aug	-0.3
2001 July	-0.1	80.6	Never		-0.8
1981 Sept	-0.3
1981 Aug	-0.1	74.8	29	72.6	-0.9
1980 April	-0.3
1980 March	-0.2	75	14	73.9	0.1
1974 Nov	-0.3
1974 Oct	-0.1	70.8	23	68.9	-0.1
1970 Sept	-0.3
1970 Aug	-0.1	69.6	20	68.8	-0.6
1949 April	-0.3
1949 March	-0.1	62.6	15	61.3	-0.4