Friday, October 02, 2009

Employment-Population Ratio, 10% Unemployment, Part Time Workers

by Calculated Risk on 10/02/2009 11:26:00 AM

A few more graphs based on the (un)employment report ...

Employment-Population Ratio

Employment Population Ratio Click on graph for larger image in new window.

This graph shows the employment-population ratio; this is the ratio of employed Americans to the adult population.

Note: the graph doesn't start at zero to better show the change.

The general upward trend from the early '60s was mostly due to women entering the workforce.

This measure fell in September to 58.8%, the lowest level since the early '80s.

The Labor Force Participation Rate fell to 65.2% (the percentage of the working age population in the labor force). This is also the lowest since the mid-80s.

When the job market starts to recover, many of these people will reenter the workforce and look for employment - and that will keep the unemployment rate elevated for some time.

This second graph shows the quarterly change in net jobs (on the x-axis) as a percentage of the civilian workforce, and the change in the unemployment rate on the y-axis. Although this data is from two different surveys, there is a clear relationship between the data. For a discussion of the two surveys, see Jobs and the Unemployment Rate.

The following data is for the last 40 years: 1969 through Q3 2009.

Unemployment Net Jobs Quarterly The Red squares are for 2008, and for the first three quarters of 2009 (the current employment recession).

The U-3 headline unemployment rate for September was reported at 9.8% (this was actually rounded down from 9.83%).

Notice the relationship is not linear. As the job market starts to recover, more people will participate in the labor force - and the Labor Force Participation Rate and the employment-population ratio will increase.

10% Unemployment

It is possible that the unemployment rate will hit 10% in October (the current unemployment rate is 9.83%, an increase of 0.17% from August).

With similar job losses in October as in September, or just more people participating in the work force - perhaps looking for one of the scarce holiday retail jobs - the unemployment rate could easily hit 10% this month. If not in October, then probably in November.

Part Time for Economic Reasons

From the BLS report:

In September, the number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 9.2 million. The number of such workers rose sharply throughout most of the fall and winter but has been little changed since March.
Part Time WorkersThe number of workers only able to find part time jobs (or have had their hours cut for economic reasons) is at a record 9.179 million.

Note: the U.S. population is significantly larger today (about 305 million) than in the early '80s (about 228 million) when the number of part time workers almost reached 7 million. That is the equivalent of about 9.3 million today, so population adjusted this is not quite a record.

Earlier employment posts today:
  • Employment Report: 263K Jobs Lost, 9.8% Unemployment Rate for graphs of unemployment rate and a comparison to previous recessions.
  • Unemployment: Stress Tests, Unemployed over 26 Weeks, Diffusion Index