Friday, September 02, 2011

Duration of Unemployment, Unemployment by Education and Diffusion Indexes

by Bill McBride on 9/02/2011 01:15:00 PM

Here are the earlier employment posts (with graphs):
August Employment Report: 0 Jobs (unchanged), 9.1% Unemployment Rate
Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
Employment graph gallery

And a few more graphs based on the employment report:

Duration of Unemployment

Unemployment Duration This graph shows the duration of unemployment as a percent of the civilian labor force. The graph shows the number of unemployed in four categories: less than 5 week, 6 to 14 weeks, 15 to 26 weeks, and 27 weeks or more.

Two categories declined in August: The 27 weeks and more (the long term unemployed) declined slightly to 6.0 million workers, or just under 4.0% of the labor force, and the '5 to 14 weeks' category edged down slightly.

The other two categories increased, especially the '15 to 26 weeks' group that increased to 2.24 million or almost 1.5% of the labor force - the highest level since January.

Unemployment by Education

Unemployment by Level of EducationThis graph shows the unemployment rate by four levels of education (all groups are 25 years and older).

Unfortunately this data only goes back to 1992 and only includes one previous recession (the stock / tech bust in 2001). Clearly education matters with regards to the unemployment rate - and it appears all four groups are generally trending down.

Although education matters for the unemployment rate, it doesn't appear to matter as far as finding new employment (all four categories are only gradually declining).

Note: This says nothing about the quality of job - many college graduates are underemployed.

Diffusion Indexes

Employment Diffusion Index This is a little more technical. The BLS diffusion index for total private employment was at 52.2 in August, down from 57.7 in July, and for manufacturing, the diffusion index decreased sharply to 42.0.

Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS. From the BLS:
Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.
This was the lowest diffusion index for total private employment since last September, and the lowest for manufacturing since January 2010.

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