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 % of 25-54 year olds employed was 80.8% in May after being 80.8% in April. It was 80.6% in Jan. 2020 just before Covid. The 80.9% in June 2023 was the highest since the 80.9% in April, 2001.
It was 80.6% in Jan. 2020 and 69.6% in April 2020. Click here to see the BLS data.
It was 79.875% for all of 2022 & 80.667% for all of 2023. The average over the first five months of 2024 is 80.72%.
The unemployment rate was 4.0% in May after being 3.9% in April. The unemployment rate was 3.6% for all of 2022 as well as 2023. Click here to go to that data.
The labor force participation rate fell to 62.53% from 62.66%. It was 62.2% for all of 2022 and was 62.6%. in 2023.
60.05% of the adult population was employed in May. So we had a slight decrease.
60.3% of the adult population was employed in 2023. So we had a slight increase.
Here is the timeline graph of the percentage of 25-54 year olds employed since 2014.
Now since 1948.
Now hours worked. This comes from the St. Louis FED. See Average Weekly Hours of All Employees, Total Private. It was 34.3 in both April & May. Shaded areas indicate U.S. recessions.
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