Here it is for the last 4 months
Aug. 80.3%
Sept. 80.2%
Oct. 79.8%
Nov. 79.7%
It is down 0.6 in three months. The last time it fell at least that much over a 3 month period before Covid was also in 2009.
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 many college age people who might not be looking for work).
It was 80.5% in Jan. 2020 and 69.6% in April 2020. Click here to see the BLS data. The unemployment rate was 3.7% in Nov (it was 3.7% in Oct.). Click here to go to that data. The % of those 16 and older employed fell from 59.957% in Oct to 59.866% in Nov.
Here is a good graph from the St. Louis Fed. It shows that there are 127,197,000 people in the 25-54 year old group. So since we are 0.8 percentage point below the 80.5% of Jan. 2020 (the high point since the previous recession), that is still 1,017,576 fewer jobs (Hat tip: Vance Ginn).
Also,
we are up 10.1 percentage points since April 2020 (79.7 - 69.6). That
is 92.66% of what we lost from Jan. 2020 to April 2020 (10.9 percentage
points or 80.5 - 69.6). Then 10.1/10.9 = 92.66%. So we have gotten about
92.66% of the jobs back (but again, we have lost some in each of the last
3 months).
Here is the timeline graph of the percentage of 25-54 year olds employed since 2012.
Now since 1948
2 comments:
A couple of my daughters-in-law have left the workforce to become full time moms.
Yes, they are unemployed.
Yes, they are not looking for work.
Chances are good that when their youngests start full-day schools they’ll look for something that pays in dollars.
How should they be counted?
Thanks for reading and commenting. Not sure how they should be counted but here is about how it actually works.
If they are between 25-54 and are not working then they are not counted as being employed. So when they quit their jobs, the % of 25-54 year olds employed went down (but at the same time, some stay at home moms might have seen their kids enter school so they might go back to work-does that cancel things out? I don't know)
On the unemployment rate, if a person is not working or actively seeking work, then the BLS does not count them as being in the labor force and then they won't be counted as an unemployed person.
Sometimes the unemployment rate can go down if people drop out of the labor force. What if there are 10 unemployed persons out of a labor force of 100. The UE rate is 10%.
But if 5 of those people get laid off and they don't even try to find a job, then the BLS says they are not in the labor force and will not be counted anymore as being unemployed.
So now the UE rate is 5-95 = .0526 or 5.26%. This is an extreme example but it illustrates how it works
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