The percentage of 25-54 year-olds employed rose 0.3 percentage points in February; average hours worked fell slightly

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).

The percentage of 25-54 year olds employed was 80.2% in Jan. and 80.5% in Feb. It was 80.2% in August. It was 80.6% in Jan. 2020 just before Covid and 80.5% is the highest since then with previous high being 80.2%. So the economy has almost recovered what it had in Jan. 2020.

It was 80.6% in Jan. 2020 and 69.6% in April 2020.  Click here to see the BLS data. The unemployment rate was 3.6% in Feb. (up from 3.4% in Jan.) Click here to go to that data. 

60.21% of the adult population was employed in Jan.
60.24% of the adult population was employed in Feb.

So a slight increase.

Here is a good graph from the St. Louis Fed. It shows that there are 127,589,000 people in the 25-54 year old group. So since we are 0.1 percentage point below the 80.6% of Jan. 2020 (the high point since the previous recession), that is still 127,589 fewer jobs (Hat tip: Vance Ginn of the Texas Public Policy Foundation). 

Also, we are up 10.9 percentage points since April 2020 (80.5 - 69.6). That is 99.09% of what we lost from Jan. 2020 to April 2020 (11.0 percentage points or 80.6 - 69.6) during Covid. Then 10.9/11.0 = 99.09%. So we have gotten about 99.09% of the jobs back.  

Here is the timeline graph of the percentage of 25-54 year olds employed since 2013.

 

Now since 1948

Now hours worked. This comes from the St. Louis FED. See Average Weekly Hours of All Employees, Total Private. They went from 34.6 in Jan. to 34.5 in Feb.

"Average weekly hours relate to the average hours per worker for which pay was received and is different from standard or scheduled hours. Factors such as unpaid absenteeism, labor turnover, part-time work, and stoppages cause average weekly hours to be lower than scheduled hours of work for an establishment. Group averages further reflect changes in the workweek of component industries. Average weekly hours are the total weekly hours divided by the employees paid for those hours."

This next graph was posted on Twitter by Harvard professor Jason Furman