Participation Rate Chart Notes
- The Labor Force Participation Rate is the calculated as the labor force divided by the working-age population.
- The Labor force is the number of people working or actively looking for work. Unemployed persons are in the labor force.
- Participation rates have generally been declining except for age group 60-64 and 65+ (the latter declining since 2019).
- In December 2019, the LFPR for those aged 25-54 was 82.9% and is 82.4% as of December 2022.
- That 0.5 percent drop represents 636,000 people.
Eight Reasons for Labor Shortage and Shrinking Participation
- Rent moratoriums
- Expanded Medicaid
- Increase in food stamps allocations
- Some Pandemic free money shotgun blast still not spent
- Cancelled or postponed student debt
- Abandoned plans for American dream of owning a home
- Fentanyl and an opioid crisis
- Covid deaths, long-covid effects, and lingering emotional scars from a Covid lockdown.
All of the above reasons reduced the marginal propensity to work. And it’s very inflationary.
In addition, skilled baby boomers and Gen-X are retiring or working fewer hours. They are increasingly replaced with Zoomers who have lower skills and do not want to work as many hours.
The skill replacement issue shows up in the memes of the day.
Work-Related Memes
- Act Your Wage is the New Meme as Career Ambitions Plunge
- Quiet Quitting, Are You Doing Only What’s Necessary at Work and No More?
Q: So why is job growth so strong?
A: Is it?
Huge Temporary Growth in Gig Work to Make Ends Meet
A prudential survey shows a Huge Temporary Growth in Gig Work to Make Ends Meet
Q: Where does one find time to take on an extra part-time job?
A: By working fewer hours at their regular job
December Jobs: Employment Rises by 717,000 All of Them Part Time
On January 6, I noted December Jobs: Employment Rises by 717,000 All of Them Part Time
Payrolls vs Employment Since March 2022
- Nonfarm Payrolls: +2,887,000
- Employment Level: +916,000
- Full Time Employment: -288,000
Full time employment is down 288,000 since March and down by 444,000 since May!
Some people call this discrepancy “noise” but it ties in with other BLS data.
Employment in the Second Quarter Fell By 287 Thousand
On January 25, I noted The BLS Reports Employment in the Second Quarter Fell By 287 Thousand
The monthly BLS payroll survey headline jobs number is based on 6% of the data. It’s timely but inaccurate.
The BEDS report is based off the Quarterly Census of Employment and Wages (QCEW) which has 95 percent of all employers. BEDS lags the monthly report by over six months but it has most of the data.
Tie This All Together
The anecdotal data, household survey, and BEDS all say one thing. The monthly Jobs says another.
So, are jobs really strong?
The data suggests that’s likely only if most of it is part-time or gig work.
Demographically Sobering Thoughts on US Employment in the Next Five Years
Looking ahead, here’s some Demographically Sobering Thoughts on US Employment in the Next Five Years
Based off demographics, I forecast very weak employment growth through 2030 and that assumes no significant employment losses due to recession.
For the full year 2023, demographics suggest a gain in employment of only 300,000 and that assumes no recession.
See the above link for more details.
On top of it all, how the Fed can untangle this inflationary mess is a mystery. The negative impacts of QE cannot be easily undone.
This post originated on MishTalk.Com.
Thanks for Tuning In!
Please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
Looks like your facebook stream is showing you the same infowars info regurgitated by blacklisted’s buddies.
“Many forecasters expected that participation would move back up fairly quickly as the pandemic faded. And for workers in their prime working years, it mostly has. Overall participation, however, remains well below pre-pandemic trends.
Some of the participation gap reflects workers who are still out of the labor force because they are sick with COVID-19 or continue to suffer lingering symptoms from previous COVID infections (“long COVID”). But recent research by Fed economists finds that the participation gap is now mostly due to excess retirements—that is, retirements in excess of what would have been expected from population aging alone. These excess retirements might now account for more than 2 million of the 3‑1/2 million shortfall in the labor force.
What explains these excess retirements? Health issues have surely played a role, as COVID has posed a particularly large threat to the lives and health of the elderly. In addition, many older workers lost their jobs in the early stages of the pandemic, when layoffs were historically high. The cost of finding new employment may have appeared particularly large for these workers, given pandemic-related disruptions to the work environment and health concerns. Also, gains in the stock market and rising house prices in the first two years of the pandemic contributed to an increase in wealth that likely facilitated early retirement for some people.”
Tell me more about your fantasies.