Reclaiming Common Sense

Unemployment is Down for those under 50 compared to July 2007.  That said, unemployment is up for those over the age of 50. The change in the 70-74 age group is negligible. The question is are they working or are they just not participating?

The monthly employment situation report for the month of July was released nearly two weeks ago. It was mostly ignored by the end of the day. This column has been spending hours researching and writing on the data since it was released.

  • "July Jobs Report Fireworks" detailed how we saw improvement in full-time jobs, part-time jobs, and the addition of more workers.
  • "Five Presidents at Six Months" detailed how President Trump has added almost as many full-time jobs as President Clinton while reducing the number of part-time jobs and reducing the number of unemployed workers. It also detailed the impact of participation on the unemployment rate and the other way around.
  • "Men Finding Full-time Work" detailed the differences between men and women and their recovery from the Great Recession. Men lost over 10 million full-time jobs during the recession. It took them until last Summer to recover those lost jobs and then those jobs went away. Participation is still lower than it was during July 2007 meaning that he effective unemployment rate is much higher than it was during July 2007. Women work more part-time jobs than men Men work more full-time jobs than women.
  • "Record Level of July Two Part-time Jobs Workers"  examined the data of people working multiple jobs. This impacts the weekly unemployment claims data, the monthly unemployment levels, and the workforce participation. While we have fewer people working two part-time jobs than we had during June of 2017 there are more people working two part-time jobs than July of 2016, or any other July since 1999.
  • "July Sector Strength" reported on the sectors that have recovered and expanded since the Great recession and those sectors that have not returned to their July 2007 emploment levels. Construction, Mining and Logging, Manufacturing and Information Technology have not returned to their pre-recession levels.

This column will address the difference in employment and unemployment, as well as participation, across the various age groups that are tracked in the data.

The workforce participation rate is down for those under the age of 55. Participation is down by almost 8% for teenagers. Participation is down by almost 3% for those 20-24 years of age. Participation is down by more than 1% for those 25-29 years of age and for those 30-34 years of age. The increase in participation for those 75 years of age and older is not enough to offset the change in the 45-49 year old age group even though their populations are roughly the same. The increase in participation for those 65-69 years of age are not enough to offset the dip in those 16-19 years of age even though their workforce populations are comparable. The same could be said comparing the changes in 60-64 year olds and those 40-44 years of age.

We have a failure to participate. We do not have a problem with Baby Boomers retiring and depressing the workforce participation rate. We have a higher participation rate right now than we normally would have because the baby boomers are not retiring.  When the stock market crashed during 2009-2010 it erased gains (March 6, 2009 - 6626.94 vs January 10, 1997 - 6703.79.) Those wh had hoped to retire at the end of 2008 saw the gains of the prior decade being erased. The pre-recession level of 14,093.08 was not surpassed until after February 22, 2013 when it closed at 14, 000.57. You will read elsewhere that the former President oversaw a tripling of the stock market from the bottom of the recession to the day he left office. It actually went from 7949 on 1/20/2009 to 13,649 on 1/20/2017. There was malaise from April 24, 2015 when the stock market was at 18,080 until November 4, 2016 when it hit 17888. If people are not participating in the economy they are not investing in the stock market. If they are not participating in the economic boom of the stock market they may not be participating the retail sales, home sales, or anything else.

It's the economy..

Employment continues to slide for those 50-54 years of age. There are many ways to examine this data. The data can be examined in month to month changes, year to year same month changes, and over a longer period of time. The thing to remember when examining this data is that there is an age shiftthat happens every five years. People who were 30-34 years of age during 2012 are now 35-39 years of age this year. This column has written numerous articles on the apparent weakness in the jobs market for those 40-44 years of age and 50-54 years of age. Some of this could be a stay at home effect due to lower job creation during the past decade. If you do not have a job you cannot often afford daycare to find work. We may have seen higher employment in the daycare field prior to the recession than now due to having more people working and needing daycare. This is a paradox.