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March 10, 2017 Feb Employment Situation
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Aug 1, 2016 Here Comes the Debt
June 26, 2016 Moribund US Economy
June 16 2016 Labor Update
Mar 10, 2016 Spring Renewal for Labor Markets?
Feb 21, 2016 GDP Gap
Feb 16, 2016 FED and Monetary Policy
Jan 19, 2016 Employment Gap Age Groups LFPR
Jan 10, 2016 A look at the Employment Situation
Dec 30, 2015 Fed Funds Rate up 25 Basis points...so what?
Dec 15, 2015 Fed Funds on the rise? Has Yellen 'Fell-in'?
Oct 15, 2015 Labor Markets Seven years of misery
Oct 6, 2015 Sept: Horrible Month for Labor
Sept 30, 2015 The FED: Interest Rate Angst
Sept 11, 2015 FED on the Monetary Policy Front
July 31, 2015 Trade and Foreign Exchange Rates
July 20, 2015 Economic Growth?
July 10, 2015 Labor Picture by Age Group
July 2, 2015 Disastrous Month in Labor Rpt
June 19, 2015 Minimum Wage - Income Distribution
Jun 5, 2015 Encouraged Worker Effect
May 8, 2015 Updated Employment Situation for April
May 4, 2015 Languishing Labor Markets
Apr 7, 2015 LFPR Doldrums on the Labor Front
March 8, 2015 Less than Zero Interest Rates - Trade War
2014 Articles
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2012 Articles
Dec 31, 2012 Fiscal Cliff --- Increased Spending
Dec 24, 2012 Fiscal Cliff---Rising Revenues with current tax cuts?
Dec 13, 2012 November Jobs Report
Nov 28, 2012 Regulation and the Financial System
Nov 17, 2012 Employment Escarpment - Moving the Jobs Needle
Oct 31, 2012 Update on Shale Gas and Tight Oil
Oct 11, 2012 Restructuring of an Industry: US Light Vehicles
Sep 4, 2012 Resuscitating the Moribund US Economy
August 4, 2012 Unemployment Rises Again
July 21, 2012 Misguided Fiscal Policy: Is it a case of fool’s gold, or the Consequences of Economic Ignorance?
July 6, 2012 Let Freedom  Ring!!! The Shale Gale
June 26 Productivity Macro
June 11, 2012 Painted into Corner
June 4, 2012 Encouraged Worker Effect
May 28, 2012 European Honeymoon Over
May 14, 2012 Back to Basics
May 4, 2012 Labor Force Participation Rate Shrinking
Apr 26, 2012 Income Distribution
Apr 15, 2012 Energy Independence
Apr 6, 2012 Jobs Jobs Jobs
Mar 27, 2012 Gas Prices Killing Economic Growth
Mar 15, 2012 Rough Road or Smooth Sailing?
March 9, 2012 Employment Challenges Ahead
Mar 6, 2012 Stalled US Economy?
Mar 1, 2012 FED Profitabiility
Feb 22, 2012 Population Changes
Feb 13, 2012 Bernanke on Unemployment
Feb 8, 2012 Lower Unemployment - Bad News?
Feb 3, 2012 Chinese Miracle???
Jan 12, 2012 Low Interest Rates - Why so low?
Jan 9, 2012 Labor Force Participation Rate
2011 & 2010 Articles
Introduction
About us
Links of Interest
Straw Poll
Definitions & Miscellaneous
 

2012 Volume Issue 6


Economic Newsletter for the New Millennium


March 9, 2012

 

Editor
Donald R. Byrne, Ph.D.
dbyrne5628@aol.com  
 

Associate Editor
Edward T. Derbin, MA, MBA
edtitan@aol.com  

For a downloadable version, click here


Employment Feb 2012.pdf



...a bit more compressed version of same


Employment Feb 2012-compressed.pdf



The Civilian Noninstitutional Population: Focusing on the Labor Force (Employed & Unemployed) and Discouraged Workers

The Employment Challenge Ahead...



This morning, the Employment Situation for February 2012 was released by the U.S. Department of Labor, Bureau of Labor Statistics

http://www.bls.gov/news.release/pdf/empsit.pdf  

 

Total nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. [Note: The unemployment rate actually increased slightly to 8.27 percent (from 8.26% in January).] Employment rose in professional and businesses services, health care and social assistance, leisure and hospitality, manufacturing, and mining.


Note: there are two surveys employed by the Bureau of Labor Statistics to measure employment: the Household Survey (Current Population Survey) includes a sample from all households, while the Payroll Survey (Current Establishment Survey) includes data from larger companies, though narrower in focus, which submit monthly workforce data.  
 
Down the Rabbit Hole (and Through the Looking-glass): Where Employment Rises and Unemployment also Rises???

May 10, 2011

http://www.econnewsletter.com/82301/55401.html  


 

In the following table, we summarize the current status of the Employment Picture and the monthly changes:

Civilian Noninstitutional Population = 16 years and older who are not in military, incarcerated, etc.; Labor Force = Employed + Unemployed (must be actively seeking employment)





February 2012 Civilian Non-institutional Population and LFPR Adjustment.pdf

+476,000 (Labor Force) - New adds 166,000 (Civilian Noninstitutional Population) = 310,000 participants returning to the Labor Force






Changes in Civilian Noninstitutional Population and Labor Force Jan 2012-Feb 2012.pdf



We’ll get to the Labor Force Participation Adjustment in a bit (Item 3). 

 

We’re going to focus on a few items:

 

1) U-3 Unemployment Rate or the Official Unemployment Rate and an alternative measure of unemployment, or the U-6 Unemployment Rate

Encouraged Worker Effect?  The Unemployment Rate rose slightly from 8.26% in January to 8.27% in February, a 0.1% increase.  This is the first uptick in the Unemployment Rate since June 2011.  The more inclusive U-6 Unemployment Rate dropped from 15.1% to 14.9%, a 0.2% decrease. 

U-3 or the Official Unemployment Rate actually rose 0.01% in February.





Updated U-3 andU-6 Unemployment 2012.pdf



The U-6 Unemployment Rate accounts for many more discouraged and other categories, including underemployed, etc.  It is currently significantly higher than U-3...perhaps an indication that there is a great deal of cyclical and structural unemployment






U-3 and U-6 Defined February 2012.pdf


 
2) Civilian Noninstitutional Population and its component parts

 
The Civilian Noninstitutional Population (those persons 16 and over not in institutions, e.g., military, prison, etc.).  

 
Civilian Labor Force (those persons employed and unemployed)


The Labor Force Participation Rate is the relationship between the Civilian Labor Force as a percent of the Civilian Noninstitutional Population.

Unemployment and Employment are subsets of the Labor Force; Civilian Noninstitutional Population includes the Labor Force and those '16 and over' who are not in the Labor Force.





Civilian Noninstitutional Population and its Component Parts.pdf



Between January 2009 and February 2012, the Civilian Noninstitutional Population expanded by 7.7 million, but the Labor Force only absorbed 700,000 which equates to 7 million increase in non-working (or seeking employment).






Key Employment Figures Jan 2009 vs. Feb 2012.pdf



Since January 2009, employment has fallen slightly and Unemployment increased slightly, but the big difference is that 7 million Americans are on the sidelines, removed from the Labor Force!  
 

January 2009
Civilian Noninstitutional Population = 234,739,000

Labor Force = 154,185,000

Employed = 142,201,000

Unemployed = 11,984,000

 

February 2012
Civilian Noninstitutional Population = 242,435,000

Labor Force = 154,871,000

Employed = 142,065,000

Unemployed = 12,806

 

Difference (Decrease)/Increase

Civilian Noninstitutional Population = 7,696,000

Labor Force = 686,000

Employed = (136,000)

Unemployed = 822,000

Sidelined from Labor Force = [7,696,000 – 686,000] = 7,010,000

The good news was that there was an uptick "encouraged workers" from Jan 2012 to Feb 2012...476,000 increase to Labor Force, but only 428,000 were added to the Employed rolls --- Unemployed increased by 48,000






Key Employment Figures Jan 2012 vs. Feb 2012.pdf



From January to February 2012, of those sidelined, not in the Labor Force 310,000 have moved back into the Labor Force.  Employed rose by 428,000, but unemployed also rose by 48,000.  How can this be?

 

1) Civilian Noninstitutional Population rose by 166,000


2)  Civilian Labor Force rose by 476,000 (Civilian Noninstitutional Population 166,000 + 310,000 formerly sidelined [not in Labor Force])

3) Employed increased by 428,000

4) Unemployed 48,000 = Civilian Labor Force (476,000) – Employed (428,000)

 


The Civilian Noninstitutional Population continues to expand at a rate of around 150,000 per month.





Civilian Noninstitutional Population.pdf




In Feb 2012 the Labor Force expanded by 476,000 (428,000 Employed and 48,000 Unemployed)






Civilian Labor Force.pdf


The 'Not in Labor Force portion of the Civilian Noninstitutional Population finally began to shrink...310,000 in February 2012





Not inLabor Force (on the sidelines).pdf



Those in the Labor Force between 16 and 54 saw losses from 2007 to 2011; those 55 and over increased their Labor Force Participation Rate...perhaps it might have had at least something to do with the fact that many older workers do not need medical coverage (retirement plans and Medicare).





2007vs. 2011 Labor Force Participation Rate by Age Group.pdf

 



3) Changes in the Labor Force Participation Rate


In previous newsletters we noted that while the Labor Force Participation Rate may have fallen off in the very youngest of cohorts (ages 16-24) due in part to more full-time enrollment in postsecondary education, the fact is that the Labor Force Participation Rate has dropped across the board, from age 16 through age 54.  The surprising thing is that since 2007, the Labor Force Participation Rate has risen significantly for ages 55 and up. 

The Labor Force Participation Rate, while improving in February to 63.9% is still lower than it has been in around 30 years --- not a good thing.





Labor Force Participation Rate.pdf




The Labor Force Participation Rate is the relationship between the Civilian Labor Force (those persons employed and unemployed) as a percent of the Civilian Noninstitutional Population (those persons 16 and over not in institutions, e.g., military, prison, etc.).  The Labor Force Participation Rate was 63.88% in February 2012; the last time the rate was below 63.9% [prior to January 2012 63.7] was May 1983 (63.7%).
 

Adjusting U-3 Unemployment to reflect a 67% Labor Force Participation Rate reveals a huge gap of nearly 5% in 'hidden' unemployment.






U-3 Unemployment with adjustment for 67% Labor Force Participation Rate.pdf


Likewise, there is also a significant gap between the reported U-6 Unemployment Rate and that reflecting a 67% Labor Force Participation Rate.
 




U-6 Unemployment with adjustment for 67% Labor Force Participation Rate.pdf



 
Lies, Damned lies, and Statistics

December 5, 2011

http://www.econnewsletter.com/103401.html   

 

Labor force Participation Rate

“The labor force participation rate represents the proportion of the civilian noninstitutional population that is in the labor force. This measure of labor force activity grew from about 60 percent nationally in 1970 to about 67 percent in 2000, with much of the increase resulting from increased participation by women.”


 


THE CHALLENGE AHEAD

 

The good news in terms of the overall employment picture is that in spite of increase an in the Unemployment Rate from January (8.26% to 8.27%) the Labor Force Participation Rate grew from 63.73% to 63.88% but consider the following:

 

In order for the unemployment rate to be at 8%, including a Labor Force Participation Rate of 66%, we would need to have 5 million more people employed.  With an average increase in the Civilian Noninstitutional Population of 150,000 per month, it would take 24 months, adding 360,000 jobs every month to reach 8% unemployment and the 66% Labor Force Participation Rate.