Reclaiming Common Sense

Employment is Down from May 2016 for those 40-44, and 50-54. Are people "retiring" in their early forties? We may be seeing a need to drop out of the workforce to raise children. We are seeing an uptick in workers 16-39.Employment for those 55 and older is at a record high for all age groups.

There is an age shift in the data. The people who were 40-44 during 2012 are now in the 45-49 year old age group. This is the age shift. There are fewer people who were 45 years of age and older during 2012 working now during May 2017. 

Unemployment is NOT down for everyone compared to May 2016. We are hearing stories of record low levels of unemployment. This column has written a number of articles on that same subject. Unemployment is up from the May 2016 levels for those 30-34 years old, 40-44 years old, and 50-54 years old. Unemployment is down for those who were unemployed during 2012. The question is, based on the participation rate, is it really down?

 The May Employment situation report has a cornucopia of data that is released with it. There is more than the headline "jobs" number. There is more than just the unemployment rate or unemployment levels or participation rate. This column produced the following articles:

The net-net of these articles is that jobs are up, participation is stable, some sectors have recovered from the recession while others have not, the recovery of some sectors explains the expansion of the female workforce while the sluggishness in other sectors explains the slow recovery for men, and that the U-3 is under-reporting the "true" unemployment levels.

How are we doing by age groups? This column has written a recurring series of articles called the "Red, Gray, and Blue" series. We have an aging workforce. The media, and the Obama Presidency, were proclaiming that the drop in participation has been due to a drop in participation of Baby Boomers as they retire. This column has established that to be a FACT (False Assertion Considered to be True.) Older people are participating at a higher rate than they were during 2007 or 2012.

The Participation Rate is DOWN for everyone under the age of 60 as compared to May 2007. Once again, we have to look at the age shift. Some of this drop in participation is due to people aging out of their age groups - there are two groups removed from where they were. The thing to notice here is that participation is up for those 60 and older as compared to 2007. There is a slight downtick in participation for those 70 years of age and older as compared to May 2016. Is the stock market doing well enough for them to retire, again?

What is the True Unemployment Rate? The Five Presidents article detailed how if we are at full-employment now, with a U-3 unemployment rate under 5%, then we must have been at "fuller" employment during  May 2007 when we had a  an unemployment rate of  4.26% and a participation rate of 65.82% compared to May 2017 with a U-3 of 4.11% and a participation rate of 62.79%. The U-7 rate, the effective unemployment rate that factors in "missing participants" as effectively unemployed of 7.9% to 8.6%.

Do we have a Negative Effective Unemployment rate for those over the age of 60? Anytime there is a negative unemployment number something is "happening." The effective unemployment rate is a good way to compare unemployment levels with different participation rates. The participation rates for those over the age of 60 have improved since the recession. The effective unemployment rate for those 20-35 years of age is a bit disconcerting. This will need further analysis during the upcoming months. Should we have more unemployed seniors? Are we at "optimal employment for seniors? Should that "by definition" be zero when we have more participants than we should have?

Participation Matters. Employment is improving month over month. Employment has improved for most age groupd May 2017 compared to May 2016. Unemployment hase dropped from May 2016 to May 2017 for most age groups, not all.Participation has improved for everyone except the very young and the very old since last May. Why doesn't "anyone" discuss this? The information is available - you just need to have it formatted in an understandable format.

It's the economy.