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What are recent labor market data telling us?

Trick or Treat?. What are recent labor market data telling us?. Norm Cloutier, Director UW-Parkside Center for Economic Education October 31, 2012. September 2012 Labor Market Report. Household Survey Unemployment rate falls to 7.8% Lowest since President Obama took office

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What are recent labor market data telling us?

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  1. Trick or Treat? What are recent labor market data telling us? Norm Cloutier, DirectorUW-Parkside Center for Economic Education October 31, 2012

  2. September 2012 Labor Market Report • Household Survey • Unemployment rate falls to 7.8% • Lowest since President Obama took office • Number employed increases by 873,000 • Largest gain since January 2003 • Establishment Survey • Jobs increase by 114,000 • 23 consecutive months of jobs gains

  3. The “Good”? • “…shows we continue to recover…” • David Plouffe, Senior White House Advisor • “…provides further evidence that the U.S. economy is continuing to heal…” • Alan Krueger, White House Council of Economic Advisors

  4. The “Bad”? • “This is not what a real recovery looks like.” • Mitt Romney, Republican candidate for President • “…another disappointing reminder of the failure of the Obama Administration’s economic policies.” • Dave Camp (R), Chair, House Ways and Means Committee

  5. …and the truly Ugly. • “Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change number.” • Jack Welch, former CEO General Electric • “…pro-Obama propaganda…” • Laura Ingraham, Talk Radio Network • “I don't think BLS cooked numbers. I think a bunch of Dems lied about getting jobs. That would have same effect.” • Conn Carroll, writer Washington Examiner

  6. At Fox News…

  7. Measuring Labor Market Performance • Household Survey • Current Population Survey of 60,000 hh regarding labor market behavior in the “reference week.” • Establishment Survey • Current Employment Statistics (CES) surveys 141,000 businesses and government agencies, 486,000 individual worksites.

  8. Categorizing Labor Market Behavior • In the Labor Force (civilian, noninstitutionalized, ≥ 16 years-of-age) • Employed: Worked in reference week. • Unemployed: Did not work in reference week, actively sought employment in last 4 weeks, and was available to work. • Not in the Labor Force: Did not work, did not look for work in the reference week, or was unable to work. • Marginally Attached: Want a job, looked in the last 12 months (but not last 4 weeks), are available. • Discouraged Workers: Not looking because of economic conditions.

  9. “The” Unemployment Rate: U3 September 2012

  10. Headline Unemployment: U3 Oct 2009 10.1% Sept 2012 7.8% Percentage

  11. Labor Force Participation Rate Mar 2001 67.2% Aug 2012 63.6% Percentage

  12. The Amazing Disappearing Worker • Decades-long decline in male 25-54 LFP • 1970: 96.0% 2012: 88.5% • Aging Boomers: “The Pig in the Python” • We may soon reach 10,000 new retirees perday • Recession: • Discouraged Workers • Premature retirement • Public policy: • Relaxed standards for disability

  13. Male and Female Labor Force Participation: 1948-2011 Percentage

  14. LFP rate of prime working age population peaked in 2000 Sept 2012 81.5% % in the labor force

  15. LFP Rate of ≥ 65 has been increasing since 1985 Sept 2012 18.6% % in the labor force

  16. … but there are soooo many more of them: the “pig in the python” is aging Sept 2012 + 196,000 Thousands

  17. Increasing share of working age population is disabled Aug 2012 5.4%

  18. Alternative Measures of Unemployment: U5 and U6 Sept 2012 14.7% Percentage Sept 2012 9.3%

  19. The “Chart of Doom”: Job Loss as Percentage of Total Employment Peak 28 32 48 cumulative % change in total employment Lost > 500,000 jobs/month, Oct `08 – Apr `09 Job Trough Feb 2010 8.76 mil jobs lost ― 1981 ― 1990― 2001 ― 2007

  20. Job Loss as Percentage of Total Employment Peak March 2010 cumulative % change in total employment 2007

  21. Government Jobs During Employment Contraction months since employment peak 2001 cumulative % change in government employment 2007 1990 1981

  22. Government Jobs During Employment Expansion 1990 2001 cumulative % change in government employment since trough 1981 2007

  23. Private vs. Government Jobs During Employment Expansion: 2001 vs. 2007 Recessions 2007 Private 2001 Private cumulative % change in employment since trough 2001 Public 2007 Public

  24. Job growth by selected industries during contraction—expansion phases of the 2007 recession ??? 11% FIRE 6% Leisure 10% Government 16% W&R Trade 15% Construction 4% Prof & Bus Serv 13% Manufacturing 9% Transport & Warehouse 3% Local Public Education 6% *%= industry’s percentage of overall employment

  25. Since March 2009 initial unemployment claims have been declining

  26. … the average length of unemployment seems to have stabilized Weeks

  27. Unemployed ≥ 27 weeks as % of total unemployed Percentage

  28. Improving conditions for job seekers?:unemployed, job openings, and quits 6.7* 3.5* 2.9* 1.4* *ratio unemployed to openings 1.1* thousands Date

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