Reclaiming Common Sense

The Unemployment Rate is up over last year for those 30-44 years of age and for those over 65. The unemployment rate has even more fluctuations than the participation rate. Just as the participation rate is masking the unemployment rate of the entire population and the male and female workforces, the lower participation rates are probably masking the true, or effective, unemployment rate.

This data is complex. There are thirteen age groups, plus seasonally adjusted and non-seasonally adjusted data sets. An entire book could be written on this compilation of data every month. It is entirely possible that graduate students could have a field day with all of this data. One month does not make a trend. 

What is going to be interesting is the sector by sector data. We know that the seasonally adjusted data in the Jobs Report and the ADP report indicated improvement in the Manufacturing, Construction, Mining and Logging, Information Technology, and Government Sectors. We also know that the huge drop in CPS non-seasonally adjusted, jobs cratered from 22.636 million to 22.163 million during January. There was a huge rebound during February. I bet you didn't read that elsewhere.  The next column will focus on the sector data.

It's the economy.

Note: All population , employment and unemployment numbers are in thousands.

Participation Changes are Numerous. Some age groups saw year over year declines while seeing improvement over where their age group was five years ago.  We saw five year decline for those who were 40 years of age and older. Some of these changes are "normal." Younger people participate at a lower rate than middle age workers who work more than older age workers. The concept that older people may be bringing down the overall participation rate seems to be faulty. People over the age of 60 have record or near record levels of participation. They also have record or near record levels of population. They are "propping up" the participation rate, if anything.The participation rate for the workforce under the age 59 is lower now than it was during February 2007. Let that absorb.

Unemployment, officially, is down for every age group since 2012. Unemployment levels did tick upward over last February for those 30-39 years of age. Unemployment levels are near record levels for the month of February for those over the age of 60. These people had jobs and are looking for work.It is also important to note that those 20-29 years of age are bearing the brunt of the unemployment problem.

Employment Improved over last February for those under 45 and over 59 years of age, from last February. The "green" table indicates year to year trends as well as five  and ten year trends. Every five years one age group "ages out" of their present age group. One of the notable trends is the huge influx of workers who were 20-24 years of age during February of 2007.  Another notable trend was the decline in workers in virtually every age group between February 2007 and 2012 as they aged into the next age group. The year over year change gives some indication as to the long term trends. A curiosity is that those who were 45 years of age and older are working less than they were during February 2012. 

Year over Year Decreases in the workforce population for the age groups between 40 and 59. We are also seeing the workforce population surge for those over the age of 60 and under the age of 40. Looking back to the 2012 data, those who were under the age of 44 are working more now than they were during 2012, or at least there are more of them. The Participation level will tell us more. We also have a smaller workforce population for those who were 45 years of age and older now than when they were working during 2012, except for those who are and were 75 years and older. We have a record level of workers in the 75 and older category.

There is more than one number in the monthly jobs report and there is more than one way to examine the data. The headline number in the seasonally adjusted (SA) Current Employment Statistics (CES) Private Sector Worker number. Some news resources quote the non-farm payroll (NFP) number that includes government workers. There is the unemployment rate (it improved,) the participation rate (it improved,) and the number of Current Population Survey (CPS) full-time and part-time workers created (both jumped.) The data can also be compared to how prior Presidents have done at the same point during their Presidencies. The "Five Presidents, Month One, Participation Matters" column details how we could have millions of potential participants sitting on the sidelines and compares this start of the Trump Presidency with the start of the Reagan Presidency. President Trump was given a similar starting participation rate as was President Reagan, both from Democrat predecessors.The data can also be broken down by gender. "Men Still Struggling to Find Full-time Jobs" details how men work more full-time jobs than women, how women work more part-time jobs than men, and how both have seen their participation rates decline after July 2007.

There has been a considerable amount of speculation as to whether or not the recent drop in participation is related to an aging "Baby Boomer" population, those born after World War Two and before 1965. This column has written a number of articles on this topic. It has been discussed in previous columns that older people are working longer, that there are gaps in the growth of jobs within the age groups for child rearing aged people, and how unemployment, employment, and participation vary by age groups.