Reclaiming Common Sense

Unemployment has been falling - yet it is up for those over 55 since October 2007. This is where the data gets interesting. Part of the argument is that the participation rate has been falling because older workers are retiring at a quicker pace that we have previously experienced. They are counted in the workforce "but they aren't participating." Participants are employed workers or unemployed workers. We have seen a surge in workers over the age of 55 and an increase in the number of unemployed workers between the ages of 55 and 74 years of age. 

Percentage of Population is also up for 55 and older. The PoP of the "Pow and Pop" is the growth in the population, and the percentage of the population, for those over the age of 55. Where are all the 16-19 year olds?

Where are our 35-54 year old workers? We saw a drop in the number of workers under the age of 49 during the first October of the Great Recession. Some of this could be an aging out from one category to the next. The situation where multiple age groups saw drops means that this drop was real and not just an "age shift." What was interesting was that there was a contraction in the number of workers for those 25 and older between 2007 and 2012. Another point of interest is that the total number of workers over the age of 50 has been steadily increasing since 2005. Prior articles have speculated that there are some people who thought that they would be able to retire during 2001 that had to delay retiring until the stock market recovered during 2008 only to have to wait many more years until the stock market recovered to that 2001 level, again.  We are still seeing sluggishness in the 45-54 year old age range. "All other" age groups have found jobs as compared to October of 2016. We have fewer workers in the age range of 35-54 age range than we had during October 2007.

Workforce Participation Has fallen since 2007 for those under the age of 55.  This column has written numerous articles regarding the "Effective Unemployment Rate" or "U-7."  Unemployment of 4% at 63% participation is not the same as unemployment of 4% at 67% participation. The missing 4% are missing participants and are effectively unemployed. This metric has been used to compare unemployment rates more men and women and for age groups. It is a relative number. What was interesting was when the U-7 metric was applied to the age group data it was found that some age groups have a "negative" unemployment rate. There "should be more" unemployed workers over the age of 65. This month the data is interesting because the effective unemployment rates are higher for those under the age of 34 than the national average. We "always" have elevated levels of unemployment for those under 20 years of age. What is happening with those 25-34 and for those 45-54?

This difference (Diff) between Population Growth and Worker Growth Does bring down the participation rate. We have had a "negative" impact on participation for those over the age of 60 for a considerable period of time. The impact of those between the ages of 60-64 has been lessening. The negative impact of teenagers has been lessening since the recession especially this October. There was a drop in unemployment and an increase in employment for teenagers this October.

Our workforce is aging. Our workers are aging. Our unemployed workers are aging.  The participation rates for those under 55 have not improved to pre-recession levels. They have improved. Some of the problem is with tracking people over the decades means that everyone ages out from their current age group within five years. Some of the the drop in participation is normal as the workforce ages and retires.

This article, and the rest of the articles posted on this website, are designed to discuss some of the details on the data that are ignored elsewhere.  The data since February have been remarkable. The problem is that they are not perceived as anything other than ho-hum because the data is seasonally adjusted and does not accurately portray what is happening on the ground. Think of the seasonally adjusted data as a fun house mirror or a side-view mirror on your car. The seasonally adjusted data distorts reality. In some ways it makes the data more enjoyable. In some way the seasonally adjusted data makes it easier to see trends. How are we changing month to month and year to year?WE have more jobs this October than any other October. This is a good thing. We have "experienced workers." That is a good thing.

It's the economy.

Note: The data used for this article is the non-seasonally adjusted Current Population Survey data

Percent of Workers (PoW) Up for those over 55 years of age. This data can also be examined from a "age shift" perspective and an age group perspective.  The percentage of workers (workers/population) has "always" been low for those under 19 and over 70. The percentage of workers under the age of 25 has fallen from 13.3% to 12.3%. The percentage of the workforce over the age of 55 has increased from 17.87% to 22.91%. The workers are graying. It isn't an illusion.

Where are the 40-49 year old people? The workforce population We have lost 4.3 million workers between the age of 40-49 years of age since 2007. The 40-44 year-olds during 2007 are now 50-54 years of age.  those numbers have fallen from 21.536 million to 21.206 million 45-49 year-olds during 2012 to 21.035 million during October 2017. The numbers for 45-49 year-olds dropped from 22.673 million  to 22.324 million to 21.7 million. They are now 59 years old.  The "age shift" of 45-59 year olds explains some of the gains seen in 55-59 year olds. There are almost 1.5 million more workers aged 55-59 than would have been anticipated during 2007.  It is also important to note that the workforce population for 16-19 year-olds is below where it was during 2007 and higher than it was during 2015. Also note that the workforce population for those over 55 is spiking.

Where are our 35-54 year old workers?

Last Friday we received a strong October Jobs Report - the Second strongest September to October private Sector worker growth since 1980. Unemployment fell, as expected, part-time jobs edged higher and full-time jobs dropped, as expected. If you heard that this past Friday you probably did not hear any more after Saturday. This column spends days digging into the details and writes more than one article on the Jobs Report data. In addition to the top line Current Population Survey (CPS) data on jobs and unemployment and the Current Employment Statistics (CES) data on workers this column has published:

  • "Five Presidents a Nine Months." This article details how President Trump has added more non-seasonally adjusted Private Sector Workers during his first nine months than his prior two-term Presidential predecessors.
  • "Multiple Job Workers Down during October."  We had seen record or near record levels of people working two part-time jobs each month last year.
  • "Men (Not) at Work" detailed how there are more new male workers than new full-time jobs for men. The same could be said for women.
  • "Work Sectors Showing Strength" reports how four sectors have not returned to October 2007 worker levels, pre-recession, and how one sector has remained at or below its October 2009 worker level

Another regular article published on this column is the "Red, Gray and Blue" or the "Aging Workforce" article series. Is the participation rate being lowered by the aging workforce? Are the younger workers lazy and not working?  There are many ways to examine the data. What is happening with the population groups? What is happening with the worker groups? What is happening with unemployment levels, participation levels, the participation rates?