An earlier post noted a few details from today’s relatively solid employment situation summary from the Bureau of Labor Statistics.
Calculated Risk has obviously posted several updated graphs, which give a good, if very general, sense of just what’s been happening in terms of employment in America.
From Bill McBride’s post at CR this morning:
The Labor Force Participation Rate was increased to 63.5% in June (blue line) from 63.4% in May. This is the percentage of the working age population in the labor force.
The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although a significant portion of the recent decline is due to demographics.
The Employment-Population ratio increased in June to 58.7% (black line).
Here’s that graph:
You can see the dip in the participation rate during the 2007-2009 recession, but note that the rate had already been declining for over a decade before that. There are a variety of reasons for this, primarily the increased number of elderly Americans. The slow employment recovery from the 2001 recession almost certainly contributed to the decline in the rate for a few years as well. Also, more adult Americans are going to college, and I suspect there might even have been an uptick in single-income households by choice.
The key reason for the rising participation rate from 1960 to 1990 was the entry of women in large numbers into the workforce.
The employment-population ratio obviously nosedived as unemployment spiked and millions of jobs were lost beginning in 2008, but it looks like that number has stabilized and is slowly creeping upward. If the unemployment rate continues falling and if the economy keeps adding jobs at the current clip, we should see that number back up around 61 percent in a couple of years.
This next graph from Calculated Risk shows the devastating decline in jobs during the 2007-2009 recession compared to other post-WW II recessions, which typically saw steep losses and strong recoveries.
Note, however, that the jobs recovery form the relatively shallow 2001 recession was painfully slow. We’re recovering at about the same rate this time around. The slower recoveries in these two most recent recessions suggest that newer forces might have come into play.
It’s worth noting, however, that part of the jobs recovery a decade ago was due to the continued growth of government payrolls. This time, public employment has been declining.
