Sunday, August 07, 2016

More Employment Graphs: Prime Age Participation, Duration of Unemployment, Unemployment by Education and more

by Bill McBride on 8/07/2016 11:56:00 AM

A few more employment graphs ...

Here are the previous posts on the employment report:

July Employment Report: 255,000 Jobs, 4.9% Unemployment Rate
Employment Comments: Another Strong Report
Public and Private Sector Payroll Jobs: Carter, Reagan, Bush, Clinton, Bush, Obama

Employment-Population Ratio, 25 to 54 years old

Employment Population Ratio, 25 to 54Since the overall participation rate has declined recently due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle.

The 25 to 54 participation rate was unchanged in July at 81.2%, and the 25 to 54 employment population ratio increased to 78.0%.

The participation rate for this group might increase a little more (or at least stabilize for a couple of years) - although the participation rate has been trending down for this group since the late '90s.

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.

The general trend has been down for all categories, and the "less than 5 weeks", "6 to 14 weeks" and "15 to 26 weeks" are all close to normal levels. 

The long term unemployed is at 1.3% of the labor force, however the number (and percent) of long term unemployed remains elevated.

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 all four groups were generally trending down - although the rate has somewhat flattened out recently.

Although education matters for the unemployment rate, it doesn't appear to matter as far as finding new employment.

Note: This says nothing about the quality of jobs - as an example, a college graduate working at minimum wage would be considered "employed".

Construction Employment

Construction EmploymentThis graph shows total construction employment as reported by the BLS (not just residential).

Since construction employment bottomed in January 2011, construction payrolls have increased by 1.23 million.

Construction employment is still below the bubble peak, but close to the level in the late '90s.

Diffusion Indexes

Employment Diffusion Index The BLS diffusion index for total private employment was at 63.7 in July, up from 61.8 in June.  A solid reading.

For manufacturing, the diffusion index was at 54.4, up from 51.3 in June.

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.  Above 60 is very good.  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.
Overall private job growth was widespread in July, and manufacturing employment was somewhat widespread.