The U.S. Economy
is STRONG, But Fragile BY RICHARD WORKS
How might the current economy be impacting employers, employees, and human resource professionals? In this article we’ll examine historical and recent data published by the U.S. Bureau of Labor Statistics. We’ll use labor force statistics data from their Current Population Survey, employment data from their Current Employment Statistics national survey, and business employment dynamics data from their Quarterly Census of Employment and Wages program. The data in this analysis have been seasonally adjusted so that regular fluctuations which are experienced each season, such as increased summer or holiday employment, may be discounted from the larger picture. This will provide a pure analysis of the labor market and economy. First, we’ll examine labor force statistics data from the Current Population Survey. Figure 1 explicitly shows (in thousands) the number of people employed, unemployed, and those not in the labor force, seasonally adjusted from January 2000 to January 2019. However, the civilian noninstitutional population 16 years and over, and the number of people in the labor force are implicitly shown as well. The referenced population can be deduced by adding the number of people employed, the number of people unemployed, and those not in the labor force. In other words, the total population would be the full shaded area of Figure 1. Similarly, the total number of people in the labor force can be deduced by adding the number of people employed with the number of people unemployed.
We see from Figure 1 that the population has increased from 211.4 million in January 2000 to 258.2 million in January 2019. Similarly, the labor force increased from 142.3 million to 163.2 million during that same time period. The number of individuals in the labor force can be divided between those employed and those not employed, but seeking employment. The number of people employed increased from 136.6 million in January 2000 to 156.7 million in January 2019, 42
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and the number of people unemployed went from 5.7 million to 6.5 million during that same time period. The number of people not in the labor force was 69.1 million at the start of 2000 and 95 million by January 2019. Another look at the data, shown in Figure 2, considers the labor force participation rate, employment-to-population ratio, and the unemployment rate. The labor force participation rate is calculated by dividing the number of people in the labor force by the number of people in the civilian noninstitutional population 16 years and over. For example, the number of people in the labor force in January 2019 was 163.2 million and the referenced population was 258.2 million. Therefore, the labor force participation rate for January 2019 was 63.2% (163.2/258.2). Similarly, the employment-to-population ratio is calculated by dividing the number employed by the referenced population. This ratio shows that 64.6 percent of the population was employed in January 2000, and now in January 2019, 60.7 percent of the population was employed.
On the other hand, the unemployment rate is calculated by dividing the number of people unemployed by the number of people in the labor force (not the population). For example, the number of people unemployed in January 2019 was 6.5 million and the number of people in the labor force was 163.2 million. Therefore, the unemployment rate for January 2019 was 4%. The percentages for the labor force participation and employment-to-population are shown on the left on Figure 2 with the unemployment percentage shown on the right. Similar to how we calculated the employment-to-population ratio, we can also calculate the unemployment-to-population ratio as well as the ratio of those not in the labor force to the population. These ratios would show us that in January 2019, 2.5 percent of the population was unemployed and 36.8 percent of the population was not in the labor force. These