month of September, the Employment in the Current Population Survey grew by
906,000; this is the best read since November 2013 – prior to that point, you
have to go back to 2003 for a 900,000+ month of growth.
The most notable point in an overall remarkable 'Employment
Situation' for September 2017 was that employment grew by 906,000. Again, this is record territory in terms of
monthly job growth. There was also a
waterfall of other good news on the labor front for the month. The labor force number is arrived at by
adding the employed and the unemployed. The
employed again came in at a plus 906,000 and the unemployed dropped and
therefore 331,000 was subtracted, netting a positive for the labor force growth
of 575,000 for September.
For the month of September, 205,000 people were added
to the Civilian Noninstitutional Population (those 16+ who are not in the
military, in prison, or otherwise counted in institutions). To arrive at the Not in the Labor Force total
you subtract the Labor Force 575,000 from the Civilian Noninstitutional
Population 205,000 to arrive at 368,000 reduction in the Not in the Labor
To put it in perspective, the 368,000 that left the
ranks of the ‘not in the labor force’, in a net sense, went directly into the
ranks of the employed. This is further
highlighted by a reduction in the unemployed of 331,000.
THE EMPLOYMENT SITUATION —SEPTEMBER 2017 (Bureau of Labor Statistics )
let’s take a look at the Labor Force Participation Rate (LFPR)
The Labor Force Participation Rate is calculated by
combining those employed with those unemployed actively seeking employment and
dividing that total by the Civilian Noninstitutional Population. Since early in 2008, when the Labor Force
Participation Rate was above 66%, the LFPR has fallen precipitously since 2008
and has not gained really gained that much traction. The good news in September was that the LFPR
came in at 63.1%, higher than it has been since September 2013.
Coming in at 60.4% the Employment-Population Ratio was
the best showing since January 2009.
The Employment-Population Ratio measures those that
are employed divided by the Civilian Noninstitutional Population. In essence, it measures those in the
population that pulling the oars, driving the economic engine.
What is clear is that while jobs are starting to
finally show up, as depicted in the climbing Employment-Population Ratio, more
idle folks have to continue to be brought back into the labor force from the
So long as this job growth continues, it doesn’t
matter if the unemployment rate ticks up (encouraged worker effect) due to the
improved prospect of employment opportunities, or if those on the sidelines go
directly into the ranks of the employed.
It all boils down to growing the economy at a rate sufficient to entice
those on the sidelines to return to the ranks of the employed.
…a few last comments on the surveys from the monthly
on the Current Population Survey (Household Survey)
The Current Population Survey is conducted by the U.S.
Census Bureau for the Bureau of Labor Statistics. On a monthly basis, 60,000 households are
surveyed and provide detailed information regarding individuals in that
1) Civilian Noninstitutional Population (CNP) – 16+
years of age not in institutions (military, prison, etc.)
2) Civilian Labor Force – those individuals from the
CNP who are either employed or not employed but actively seeking employment
3) Not in the Civilian Labor Force – those individuals
in the CNP who are not part of the Labor Force [neither employed, nor actively
The survey itself is quite extensive, but we will
focus on specific labor market issues including the Labor Force Participation
Rate and the Employment-Population Ratio (Employed divided by the Civilian
Current Population Survey Questionnaire – Labor Force
Current Employment Statistics – CES (Establishment Survey/Payroll Survey)
For changes in jobs, the Bureau of Labor Statistics, along
with the media in general, tend to point to the Payroll Survey/Report [Current
Employment Statistics - CES (National)] which tallies up numbers drawn from
surveys submitted by various entities – “Each month the Current Employment
Statistics (CES) program surveys approximately 144,000 businesses and
government agencies, representing approximately 554,000 individual worksites,
in order to provide detailed industry data on employment, hours, and earnings
of workers on nonfarm payrolls.”
“[T]otal nonfarm payroll employment changed little
(-33,000), the U.S. Bureau of Labor Statistics reported today. A sharp
employment decline in food services and drinking places and below-trend growth
in some other industries likely reflected the impact of Hurricanes Irma and
“Hurricanes Irma and Harvey Hurricane Irma made landfall
in Florida on September 10—during the reference period for both the
establishment and household surveys—causing severe damage in Florida and other
parts of the Southeast. Hurricane Harvey made landfall in Texas on August
25—prior to the September reference periods—resulting in severe damage in Texas
and other areas of the Gulf Coast. Our
analysis suggests that the net effect of these hurricanes was to reduce the
estimate of total nonfarm payroll employment for September (Payroll Survey).
There was no discernible effect on the national unemployment rate (Household
Survey). No changes were made to either
the establishment or household survey estimation procedures for the September
Again, in September, due at least in part to the
disruption caused by Hurricane Harvey in Texas and Hurricane Irma in Florida,
the Payroll Survey was adversely affected.