by Umar Farooq
“If one exclusively listened to rhetoric about the U.S. labor market without checking the data, it’d be tough to tell exactly how things are going. On the one hand, Federal Reserve Chair Janet Yellen and several of her colleagues have suggested the American job landscape is nearing full employment and is almost as good as it could reasonably be. On the other, President Donald Trump has indicated he inherited “a mess” of an economic situation and has at at times called the country’s unemployment rate – which in March dropped to 4.5 percent – “fake” and “one of the biggest hoaxes in American modern politics.” Luckily for those lost in the back-and-forth, the government puts out employment statistics every month to help economists gauge the economy’s current health and the direction it seems to be heading. But even those official reports in recent months have been tough to read – as job growth unexpectedly surged in January and February before dropping off demonstrably in March.” usnews
Here are five telling charts revealing ominous US employment trends that are often ignored or overlooked.
1.Fewer Adults Are Working Fewer Hours
A smaller percentage of the adult population is working now than in the past.
Bureau of Economic Analysis
2. The Labor Force Participation Rate Is Declining
This first chart shows the overall civilian labor force participation rate, which grew from the mid-1960s right up until the start of the century. But this chart doesn’t paint the whole picture. It looks like things were just fine up until 2000. Not really. The next two charts show what really happened.
St. Louis Federal Reserve
3. The Drop-Off in the Male Labor Force Participation Is Huge
The second chart is the male labor force participation rate. The drop-off has been significant.
St. Louis Federal Reserve
4.The Female Labor Force Participation Rate Has Doubled
The Female Labor Force Participation Rate Has Doubled. Note that the participation rate for women doubled in the 50 years up till 2000. Meanwhile, for men it went from almost 90% (87.4% to be precise) to just below 70% today.
Again, both men and women are dropping out of the labor force at higher rates. But Eberstadt shows it is more common for men to do so. The trend is getting worse, too.
Larry Summers shared the below trend chart in his Men Without Work book review.
In short, Men without work eventually become men without hope, and that is bad for everyone.
I’m starting to feel like a broken record. The unemployment rate is not reflective of labor participation. It is only a percentage of unemployed collecting unemployment.