Category Archives: Unemployment

Unemployment And The “Not In Labor Force” Statistic

Employment and unemployment statistics can be interpreted in various manners, and as such the resulting conclusions often vary.  Due to the importance to both individuals and the economy at large, the overall topic of unemployment remains hotly contested.

At this point, it is widely recognized that recent “job gains” have been strong, and that the overall employment situation is getting stronger.  Various media sources have compared recent job gains to those seen in the 1990s, including this excerpt from a February 6 Bloomberg article:

Payroll gains averaged 336,000 over the last three months, the strongest since a comparable period ended in November 1997.

For reference, here is a chart of monthly gains from the CalculatedRisk post of February 6, 2015, titled “January Unemployment Report:  257,000 Jobs, 5.7% Unemployment Rate“:

CR 2-6-15 - EmployJan2015

Furthermore, Gallup’s U.S. Job Creation Index shows steady gains, as seen in the February 6 post titled “U.S. Job Creation Index Lingers Near Seven-Year High.”

However, is it true that the job market is “strong” and is poised for additional robust and sustainable gains, as seen in the February 7 Wall Street Journal article titled “Job Market Looks Ripe for Liftoff“?   There remains a variety of statistics that indicate highly disconcerting aspects, and as such there may be reasons to believe that gains in the employment situation are either not as robust as widely believed or that the purported recent gains are (substantially or totally) a mirage when compared to the “true” underlying condition.

As well, with regard to the future employment situation, there exists an array of highly worrisome dynamics.  While these many dynamics are numerous and many are complex – and as such aren’t suitably discussed in a brief manner – below are various comments.

While there are many types of unemployment statistics, and even more portraying accompanying income trends, the official Unemployment Rate (U-3) remains the most recognized and disseminated unemployment figure.  Currently that rate is 5.7%.

However, as I continue to believe that this figure is (highly) suboptimal for various reasons, I tend to focus on a broader mix of unemployment statistics.  One set of statistics I follow closely is seen in the “3 Critical Unemployment Charts” update.

Another unemployment measure that I have found notable is the “Not in (The) Labor Force” statistic.  Here is the description from the Bureau of Labor Statistics (BLS) page titled “Current Population Survey Frequently Asked Questions“:

Who is not in the labor force?

Persons not in the labor force are those who are not classified as employed or unemployed during the survey reference week.

Labor force measures are based on the civilian noninstitutional population 16 years old and over. (Excluded are persons under 16 years of age, all persons confined to institutions such as nursing homes and prisons, and persons on active duty in the Armed Forces.) The labor force is made up of the employed and the unemployed. The remainder—those who have no job and are not looking for one—are counted as “not in the labor force.” Many who are not in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force.

Commentary from the Wall Street Journal editorial of October 23, 2013 concerning this statistic is titled “90 Million Americans Not Working.”

The current figure, last updated on February 6, 2015 depicting data through January 2015, is 93.674 million people (Not Seasonally Adjusted) :

not in labor force

US. Bureau of Labor Statistics, Not in Labor Force [LNU05000000], retrieved from FRED, Federal Reserve Bank of St. Louis:

https://research.stlouisfed.org/fred2/series/LNU05000000/, February 6, 2015.

There are various aspects of the above “Not in Labor Force” measure that I continue to find worrisome, even when one takes into consideration various commonly cited factors regarding those retiring, those going back to school, etc.  One aspects that I find worrisome is the “parabolic” trajectory.  While this lengthy “parabolic trajectory” does not in itself “guarantee” any particular outcome, I view its formation and ascent to be disconcerting, especially since these types of “parabolic trajectories” often serve as an omen to future (substantially higher) values.

One question that arises is what fundamental factor(s) may cause the above-mentioned parabola to “explode” higher?  While, unfortunately, there are many different reasons to expect a substantial increase in the “Not in Labor Force” statistic, the largest increase will accompany, as well as contribute to, the “Next Financial Crisis.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2055.47 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of February 6, 2015

Shortly after each monthly employment report I have been posting a continual series titled “3 Critical Unemployment Charts.”

Of course, there are many other employment charts that can be displayed as well.

For reference purposes, below are the U-3 and U-6 Unemployment Rate charts from a long-term historical perspective.  Both charts are from the St. Louis Fed site.  The U-3 measure is what is commonly referred to as the official unemployment rate; whereas the U-6 rate is officially (per Bureau of Labor Statistics) defined as:

Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

Of note, many economic observers use the U-6 rate as a (closer) proxy of the actual unemployment rate rather than that depicted by the U-3 measure.

Here is the U-3 chart, currently showing a 5.7% unemployment rate:

(click on charts to enlarge images)(charts updated as of 2-6-15)

unemployment rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate [UNRATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed February 6, 2015;

http://research.stlouisfed.org/fred2/series/UNRATE

Here is the U-6 chart, currently showing a 11.3% unemployment rate:

U-6 Rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons  [U6RATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed February 6, 2015;

http://research.stlouisfed.org/fred2/series/U6RATE

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2070.72 as this post is written

3 Critical Unemployment Charts – February 2015

As I have commented previously, as in the October 6, 2009 post (“A Note About Unemployment Statistics”), in my opinion the official methodologies used to measure the various job loss and unemployment statistics do not provide an accurate depiction; they serve to understate the severity of unemployment.

However, even if one chooses to look at the official statistics, the following charts provide an interesting (and disconcerting) long-term perspective of certain aspects of the officially-stated unemployment situation.

The three charts below are from the St. Louis Fed site.  Here is the Median Duration of Unemployment (current value = 13.4 weeks) :

(click on charts to enlarge images)(charts updated as of 2-6-15)

median duration of unemployment

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Median Duration of Unemployment [UEMPMED] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed February 6, 2015;

http://research.stlouisfed.org/fred2/series/UEMPMED

Here is the chart for Unemployed 27 Weeks and Over (current value = 2.800 million) :

unemployed 27 weeks and over

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilians Unemployed for 27 Weeks and Over [UEMP27OV] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed February 6, 2015;

http://research.stlouisfed.org/fred2/series/UEMP27OV

Here is the chart for Total Nonfarm Payroll (current value = 140.849 million) :

total nonfarm payrolls

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: All Employees: Total nonfarm [PAYEMS] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed February 6, 2015;

https://research.stlouisfed.org/fred2/series/PAYEMS

As depicted by these charts, our unemployment problem is severe.  Unfortunately, there do not appear to be any “easy” solutions.

On April 24, 2012 I wrote a five-part blog post titled “The Unemployment Situation Facing The United States”, which discusses various problematical issues concerning the present and future employment situation.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2070.34 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of January 9, 2015

Shortly after each monthly employment report I have been posting a continual series titled “3 Critical Unemployment Charts.”

Of course, there are many other employment charts that can be displayed as well.

For reference purposes, below are the U-3 and U-6 Unemployment Rate charts from a long-term historical perspective.  Both charts are from the St. Louis Fed site.  The U-3 measure is what is commonly referred to as the official unemployment rate; whereas the U-6 rate is officially (per Bureau of Labor Statistics) defined as:

Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

Of note, many economic observers use the U-6 rate as a (closer) proxy of the actual unemployment rate rather than that depicted by the U-3 measure.

Here is the U-3 chart, currently showing a 5.6% unemployment rate:

(click on charts to enlarge images)(charts updated as of 1-9-15)

U-3 Rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate [UNRATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed January 9, 2015;

http://research.stlouisfed.org/fred2/series/UNRATE

Here is the U-6 chart, currently showing a 11.2% unemployment rate:

U-6 rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons  [U6RATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed January 9, 2015;

http://research.stlouisfed.org/fred2/series/U6RATE

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2044.40 as this post is written

3 Critical Unemployment Charts – January 2015

As I have commented previously, as in the October 6, 2009 post (“A Note About Unemployment Statistics”), in my opinion the official methodologies used to measure the various job loss and unemployment statistics do not provide an accurate depiction; they serve to understate the severity of unemployment.

However, even if one chooses to look at the official statistics, the following charts provide an interesting (and disconcerting) long-term perspective of certain aspects of the officially-stated unemployment situation.

The three charts below are from the St. Louis Fed site.  Here is the Median Duration of Unemployment (current value = 12.6 weeks) :

(click on charts to enlarge images)(charts updated as of 1-9-15)

median duration of unemployment

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Median Duration of Unemployment [UEMPMED] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed January 9, 2015;

http://research.stlouisfed.org/fred2/series/UEMPMED

Here is the chart for Unemployed 27 Weeks and Over (current value = 2.785 million) :

unemployed 27 weeks and over

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilians Unemployed for 27 Weeks and Over [UEMP27OV] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed January 9, 2015;

http://research.stlouisfed.org/fred2/series/UEMP27OV

Here is the chart for Total Nonfarm Payroll (current value = 140.347 million) :

total nonfarm payrolls

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: All Employees: Total nonfarm [PAYEMS] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed January 9, 2015;

https://research.stlouisfed.org/fred2/series/PAYEMS

As depicted by these charts, our unemployment problem is severe.  Unfortunately, there do not appear to be any “easy” solutions.

On April 24, 2012 I wrote a five-part blog post titled “The Unemployment Situation Facing The United States”, which discusses various problematical issues concerning the present and future employment situation.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2049.53 as this post is written

“Not In Labor Force” Statistic – As Of December 2014

In the November 13, 2013 post (“Not In Labor Force Statistic“) I featured editorial commentary from the Wall Street Journal, as well as an accompanying long-term chart, with regard to the number of people not working.

Below is an updated chart regarding this statistic.  The current figure, last updated on December 5, 2014 depicting data through November 2014, is 92.547 million people (Not Seasonally Adjusted) :

Not In Labor Force

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Not In Labor Force [LNU05000000] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed December 6, 2014;

http://research.stlouisfed.org/fred2/series/LNU05000000

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2075.37 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of December 5, 2014

Shortly after each monthly employment report I have been posting a continual series titled “3 Critical Unemployment Charts.”

Of course, there are many other employment charts that can be displayed as well.

For reference purposes, below are the U-3 and U-6 Unemployment Rate charts from a long-term historical perspective.  Both charts are from the St. Louis Fed site.  The U-3 measure is what is commonly referred to as the official unemployment rate; whereas the U-6 rate is officially (per Bureau of Labor Statistics) defined as:

Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

Of note, many economic observers use the U-6 rate as a (closer) proxy of the actual unemployment rate rather than that depicted by the U-3 measure.

Here is the U-3 chart, currently showing a 5.8% unemployment rate:

(click on charts to enlarge images)(charts updated as of 12-5-14)

unemployment rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate [UNRATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed December 5, 2014;

http://research.stlouisfed.org/fred2/series/UNRATE

Here is the U-6 chart, currently showing a 11.4% unemployment rate:

U-6 unemployment rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons  [U6RATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed December 5, 2014;

http://research.stlouisfed.org/fred2/series/U6RATE

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2075.85 as this post is written

3 Critical Unemployment Charts – December 2014

As I have commented previously, as in the October 6, 2009 post (“A Note About Unemployment Statistics”), in my opinion the official methodologies used to measure the various job loss and unemployment statistics do not provide an accurate depiction; they serve to understate the severity of unemployment.

However, even if one chooses to look at the official statistics, the following charts provide an interesting (and disconcerting) long-term perspective of certain aspects of the officially-stated unemployment situation.

The three charts below are from the St. Louis Fed site.  Here is the Median Duration of Unemployment (current value = 12.8 weeks) :

(click on charts to enlarge images)(charts updated as of 12-5-14)

Median Duration of Unemployment

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Median Duration of Unemployment [UEMPMED] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed December 5, 2014;

http://research.stlouisfed.org/fred2/series/UEMPMED

Here is the chart for Unemployed 27 Weeks and Over (current value = 2.815 million) :

Unemployed 27 weeks and over

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilians Unemployed for 27 Weeks and Over [UEMP27OV] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed December 5, 2014;

http://research.stlouisfed.org/fred2/series/UEMP27OV

Here is the chart for Total Nonfarm Payroll (current value = 140.045 million) :

total nonfarm payrolls

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: All Employees: Total nonfarm [PAYEMS] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed December 5, 2014;

https://research.stlouisfed.org/fred2/series/PAYEMS

As depicted by these charts, our unemployment problem is severe.  Unfortunately, there do not appear to be any “easy” solutions.

On April 24, 2012 I wrote a five-part blog post titled “The Unemployment Situation Facing The United States”, which discusses various problematical issues concerning the present and future employment situation.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2075.61 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of November 7, 2014

Shortly after each monthly employment report I have been posting a continual series titled “3 Critical Unemployment Charts.”

Of course, there are many other employment charts that can be displayed as well.

For reference purposes, below are the U-3 and U-6 Unemployment Rate charts from a long-term historical perspective.  Both charts are from the St. Louis Fed site.  The U-3 measure is what is commonly referred to as the official unemployment rate; whereas the U-6 rate is officially (per Bureau of Labor Statistics) defined as:

Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

Of note, many economic observers use the U-6 rate as a (closer) proxy of the actual unemployment rate rather than that depicted by the U-3 measure.

Here is the U-3 chart, currently showing a 5.8% unemployment rate:

(click on charts to enlarge images)(charts updated as of 11-7-14)

unemployment rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate [UNRATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed November 7, 2014;

http://research.stlouisfed.org/fred2/series/UNRATE

Here is the U-6 chart, currently showing a 11.5% unemployment rate:

U-6 unemployment rate

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons  [U6RATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed November 7, 2014;

http://research.stlouisfed.org/fred2/series/U6RATE

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2032.65 as this post is written

3 Critical Unemployment Charts – November 2014

As I have commented previously, as in the October 6, 2009 post (“A Note About Unemployment Statistics”), in my opinion the official methodologies used to measure the various job loss and unemployment statistics do not provide an accurate depiction; they serve to understate the severity of unemployment.

However, even if one chooses to look at the official statistics, the following charts provide an interesting (and disconcerting) long-term perspective of certain aspects of the officially-stated unemployment situation.

The three charts below are from the St. Louis Fed site.  Here is the Median Duration of Unemployment (current value = 13.7 weeks) :

(click on charts to enlarge images)(charts updated as of 11-7-14)

median duration of unemployment

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Median Duration of Unemployment [UEMPMED] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed November 7, 2014;

http://research.stlouisfed.org/fred2/series/UEMPMED

Here is the chart for Unemployed 27 Weeks and Over (current value = 2.916 million) :

unemployment 27 weeks and over

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilians Unemployed for 27 Weeks and Over [UEMP27OV] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed November 7, 2014;

http://research.stlouisfed.org/fred2/series/UEMP27OV

Here is the chart for Total Nonfarm Payroll (current value = 139.680 million) :

non-farm payrolls

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: All Employees: Total nonfarm [PAYEMS] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed November 7, 2014;

https://research.stlouisfed.org/fred2/series/PAYEMS

As depicted by these charts, our unemployment problem is severe.  Unfortunately, there do not appear to be any “easy” solutions.

On April 24, 2012 I wrote a five-part blog post titled “The Unemployment Situation Facing The United States”, which discusses various problematical issues concerning the present and future employment situation.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2033.07 as this post is written