The November Jobs Report was tepidly received on Friday December 7th. The "headline jobs number" was lower than anticipated. Wages grew, just not at the employment level "wanted." Unemployment dropped. The problem is that most individuals report on the report and not on the data. This column has already published three articles covering the November Jobs Report:
There were some general trends that were observed in the data, the Current Employment Statistics Data, when it was broken down by age. The workforce population increased November to November for all but three age groups, Employment levels grew for all but two groups, and November unemployment grew for all except three groups.
The workforce population declined for three groups. The workforce population dropped month to month and November to November for those 20-24 years of age, 45-49 years old, and 50-54 years old. The workforce population increased both month to month and November to November for those 25-29, 30-34, 55-59, 70-74, and 75 years of age and older.
We had a record level of worker for those over the age of 55. November to November employment declined for those 20-24 years old and for those 50-54 years old. The number of workers improved month to month and November to November for those 30-34, 35-39, 45-49, and 55 years of age and older. There has been plenty of discussion that the number of retiring baby Boomers is, or has been, depressing the workforce participation rate. What if they are not retiring? We saw both a decline in workers and in the workforce population for those 20-24 years old and 50-54 years of age November to November. They are not retiring. Some data on employment by age can be found here.
Unemployment fell month to month and November to November for only five age groups. The data indicates that unemployment improved for those 20-24, 30-34, 35-39, 40-44, 45-49 both month to month and November to November. Unemployment was up both month to month and November to November for those 50-54 and 65-69years of age. Unemployment was up over last November for those over the age of 75. They aren't retiring.
What we have is a failure to participate. The original line was "What we've got here is a failure to communicate" was from the movie "Cool Hand Luke." Participants are those who are employed or unemployed. The percentage of the workforce population has been increasing for those over the age of 60. Participation started dropping for those 40-44 and 45-49 during 2007. That malaise spread to those 50-54 during 2011 and those 55-59 years of age during 2017. Some of this is "age shift." People who were 40-44 during 2007 were 45-49 during 2012 and 50-54 during 2017. The percentage of population and workforce participation data show a trend.
Do we have full-employment? Some people are comparing the Current Population Survey Unemployment level with the JOLTS (Job Openings and Labor Turnover Survey) Job Openings Data. They might as well compare the CPS unemployment data with the weekly continuing claims unemployment data. They might as well compare an apple to a pomegranate to a red Anjou pear..All three are red. All three are fruits. The Five Presidents article compared the unemployment rate and the participation rate of the five Presidents after 22 months in office. We had a participation rate of 66.87% and an unemployment rate of just 3.74% during November 2000. This November we had a unemployment rate of 3.47% and a participation rate of just 62.88%. Comparable unemployment rates, not comparable participation rates. If this is full employment then we had" fuller employment" during November 2000.
Do we have negative unemployment? This column has discussed a measure of unemployment called U-7 or "effective unemployment." It compares the same month data for employment and unemployment and population. The current U-7 is 10.15% based on the November 1999 participation rate of 67.04% and unemployment rate of 3.85%. If the same process is applied to the data for the various age groups we find that we have "over-participating" seniors and under-participating youth. The participation rate is up for every age group over the age of 55, compared to November 2007, and down for everyone under the age of 55 (16-54 years of age.) We have fewer unemployed workers than "expected" for those over the age of 55.
Last week an article was published elsewhere that "older workers are our most undervalued natural resource." It goes deeper than that. We had a recession during 2001. Some people "could not afford to retire." The second recession of 2008 wiped out all of the gains in the stock market between 2001 and 2008, so people who wanted to retire "could not retire" during 2008. Some in the media are confusing "reaching retirement age" with "retiring." We are seeing signs of improvement as younger workers are stating to participate at a higher rate. There is still a problem for those 44-59 years of age.
It's the economy.
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