Trading Concept
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Trading Concept
No Result
View All Result
Home Trading News

The Labor Force Participation Rate

by
November 14, 2021
in Trading News
0
0
SHARES
2
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

Cathie Wood says rising rates hit her strategy like an earthquake and cyclical stocks are next

Potentially deadly fungus is spreading at an ‘alarming rate,’ CDC says

by Calculated Risk on 11/14/2021 02:13:00 PM

On Friday, Goldman Sachs economists put out a research note on the labor force participation rate: Why Isn’t Labor Force Participation Recovering?

Here are few excerpts from the note:
While the unemployment rate continues to fall quickly, labor force participation has made no progress since August 2020. … Most of the 5.0mn persons who have exited the labor force since the start of the pandemic are over age 55 (3.4mn), largely reflecting early (1.5mn) and natural (1mn) retirements that likely won’t reverse. The outlook for prime-age persons who have exited the labor force (1.7mn) is more positive, since very few are discouraged and most still view their exits as temporary.
First, there are two important monthly surveys from the BLS. The participation rate (and unemployment rate) comes from the Current Population Survey (CPS: commonly called the household survey), a monthly survey of about 60,000 households.

The jobs number comes from Current Employment Statistics (CES: payroll survey), a sample of approximately 634,000 business establishments nationwide.

These are very different surveys: the CPS gives the total number of employed (and unemployed including the alternative measures), and the CES gives the total number of positions (excluding some categories like the self-employed, and a person working two jobs counts as two positions).

Currently the payroll survey shows there are 4.2 million fewer jobs than in February 2020 (pre-pandemic).
The household survey shows there are 2.99 million fewer people in the labor force than in February 2020. The 5 million number probably assumes some normal labor force growth, however, overall population growth has been dismal over the last 2 years (little immigration and large number of deaths). I’m not confident in Goldman’s 5 million person estimate.
Here is a graph that shows the employment population ratio and the participation rate through the October 2021 employment report.

Click on graph for larger image.

The Labor Force Participation Rate was unchanged at 61.6% in October, from 61.6% in September. This is the percentage of the working age population in the labor force.

The Employment-Population ratio increased to 58.8% from 58.7% (black line).

Both are far below the pre-pandemic levels, however the overall participation rate was expected to decline due to demographics.

Since the overall participation rate has declined due to the pandemic 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.

The 25 to 54 participation rate increased in October to 81.7% from 81.6% in September, and the 25 to 54 employment population ratio increased to 78.3% from 78.0% in September.

Both are still low and indicate that many prime workers have still not returned to the labor force.
In the note, Goldman argues “Most of the 5.0mn persons who have exited the labor force since the start of the pandemic are over age 55 (3.4mn), largely reflecting early (1.5mn) and natural (1mn) retirements that likely won’t reverse.” There probably have been a large number of people retiring over the last 2 years, but I think more at least half of the people missing from the labor force are prime age.

Here is a graph of the change in the participation rate by age cohort (October 2019, October 2020, and October 2021 NSA).

If more older people were retiring than expected, we’d see a decline from Blue (pre-pandemic) to Red (pandemic) to Black (October 2021). We do see this for the “70 to 74” and “75+” age groups. And this does suggest more retirements than expected in the 70+ age groups.
However the “55 to 59”, “60 to 64” and “65 to 69” age groups are recovering similar to the prime age groups.
If we calculate the expected labor force by cohort, using the pre-pandemic participation rates, about 50% of the people missing from the labor force are in the prime working age (25 to 54). About 75% of the people missing are in the 20 to 65 age group.
This suggests to me that there is more slack in the labor market than Goldman estimates.
ShareTweetPin

Related Posts

Cathie Wood says rising rates hit her strategy like an earthquake and cyclical stocks are next

by
March 21, 2023
0

Ark Invest's Cathie Wood said rapid interest rate hikes over the past year are now starting to hit cyclical pockets...

Potentially deadly fungus is spreading at an ‘alarming rate,’ CDC says

by
March 21, 2023
0

Candida auris is a yeast responsible for many infections. Resistant to most anti-fungal drugs, this fungus causes several deaths worldwide....

Bitcoin, ether build on recent gains as investors await Fed rate hike decision

by
March 21, 2023
0

Pedestrians walk past an advertisement displaying a Bitcoin cryptocurrency token on February 15, 2022 in Hong Kong, China. Anthony Kwan...

Home sales spike 14.5% in February as the median price drops for the first time in over a decade

by
March 21, 2023
0

Sales of previously owned homes rose 14.5% in February compared with January, according to a seasonally adjusted count by the...

GameStop stock soars after retailer posts first quarterly profit in two years

by
March 21, 2023
0

In this article GME Follow your favorite stocksCREATE FREE ACCOUNT A GameStop store operates in a strip mall on March...

Next Post

Musk Taunts Bernie Sanders, Suggests He’d Sell More Tesla Stock

6 Best Vanguard Funds to Buy and Hold

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:



By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • WHO says Covid vaccine booster programs will prolong pandemic

    0 shares
    Share 0 Tweet 0
  • Forget Tesla — this auto stock is the one to buy right now, analyst says

    0 shares
    Share 0 Tweet 0
  • Spin or Split? AT&T Has a Big Decision to Make on Discovery Stake.

    0 shares
    Share 0 Tweet 0
  • Here’s how Carl Icahn is positioning for a possible recession in America

    0 shares
    Share 0 Tweet 0
  • Some lawmakers and their families are betting thousands of dollars on crypto

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by tradingconcept.net
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

All rights reserved by www.tradingconcept.net