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Trick or Treat?. What are recent labor market data telling us?. Norm Cloutier, Director UW-Parkside Center for Economic Education October 31, 2012. September 2012 Labor Market Report. Household Survey Unemployment rate falls to 7.8% Lowest since President Obama took office - PowerPoint PPT Presentation
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What are recent labor market data telling us?What are recent labor market data telling us?
Norm Cloutier, DirectorUW-Parkside Center for Economic EducationOctober 31, 2012
Trick or Treat?
Trick or Treat?
September 2012 September 2012 Labor Market ReportLabor Market Report
• Household Survey– Unemployment rate falls to 7.8%
• Lowest since President Obama took office
– Number employed increases by 873,000• Largest gain since January 2003
• Establishment Survey– Jobs increase by 114,000
• 23 consecutive months of jobs gains
The “Good”?The “Good”?• “…shows we continue to recover…”
– David Plouffe, Senior White House Advisor
• “…provides further evidence that the U.S. economy is continuing to heal…”
– Alan Krueger, White House Council of Economic Advisors
The “Bad”?The “Bad”?• “This is not what a real recovery looks
like.”– Mitt Romney, Republican candidate for President
• “…another disappointing reminder of the failure of the Obama Administration’s economic policies.”
– Dave Camp (R), Chair, House Ways and Means Committee
……and the truly and the truly UglyUgly..• “Unbelievable jobs numbers..these Chicago
guys will do anything..can’t debate so change number.”
– Jack Welch, former CEO General Electric
• “…pro-Obama propaganda…”– Laura Ingraham, Talk Radio Network
• “I don't think BLS cooked numbers. I think a bunch of Dems lied about getting jobs. That would have same effect.”
– Conn Carroll, writer Washington Examiner
At Fox News…At Fox News…
Measuring Measuring Labor Market PerformanceLabor Market Performance
• Household Survey– Current Population Survey of 60,000 hh regarding
labor market behavior in the “reference week.”
• Establishment Survey– Current Employment Statistics (CES) surveys
141,000 businesses and government agencies, 486,000 individual worksites.
Categorizing Categorizing Labor Market BehaviorLabor Market Behavior
• In the Labor Force (civilian, noninstitutionalized, ≥ 16 years-of-age)
– Employed: Worked in reference week.– Unemployed: Did not work in reference week, actively
sought employment in last 4 weeks, and was available to work.
• Not in the Labor Force: Did not work, did not look for work in the reference week, or was unable to work.– Marginally Attached: Want a job, looked in the last 12
months (but not last 4 weeks), are available.• Discouraged Workers: Not looking because of
economic conditions.
““The” Unemployment Rate: U3The” Unemployment Rate: U3September 2012
Headline Unemployment: U3Headline Unemployment: U3
Sept 2012 7.8%
Oct 200910.1%
Per
cen
tag
e
Labor Force Participation RateLabor Force Participation Rate
Aug 2012 63.6%
Mar 200167.2%
Per
cen
tag
e
The Amazing Disappearing WorkerThe Amazing Disappearing Worker
• Decades-long decline in male 25-54 LFP– 1970: 96.0% 2012: 88.5%
• Aging Boomers: “The Pig in the Python”– We may soon reach 10,000 new retirees per day
• Recession: – Discouraged Workers– Premature retirement
• Public policy: – Relaxed standards for disability
Male and Female Male and Female Labor Force Participation: 1948-2011Labor Force Participation: 1948-2011
Per
cen
tag
e
LFP rate of prime working age LFP rate of prime working age population peaked in 2000population peaked in 2000
Sept 2012 81.5%
% in
th
e la
bo
r fo
rce
LFP Rate of ≥ 65 has been LFP Rate of ≥ 65 has been increasing since 1985increasing since 1985
Sept 2012 18.6%
% in
th
e la
bo
r fo
rce
… … but there are soooo many more of but there are soooo many more of them: the “pig in the python” is agingthem: the “pig in the python” is aging
Sept 2012 + 196,000
Th
ou
san
ds
Increasing share of working age Increasing share of working age population is disabledpopulation is disabled
Aug 2012 5.4%
Alternative Measures of Alternative Measures of Unemployment: U5 and U6Unemployment: U5 and U6
Sept 20129.3%
Sept 201214.7%
Per
cen
tag
e
The “Chart of Doom”: The “Chart of Doom”: Job Loss as Percentage of Total Employment PeakJob Loss as Percentage of Total Employment Peak
Job TroughFeb 20108.76 mil jobs lost
Lost > 500,000 jobs/month, Oct `08 – Apr `09
28
― 1981 ― 1990 ― 2001 ― 2007
cum
ula
tive
% c
han
ge
in t
ota
l e
mp
loym
ent
4832
Job Loss as Percentage of Total Job Loss as Percentage of Total Employment PeakEmployment Peak
2007
cum
ula
tive
% c
han
ge
in t
ota
l e
mp
loym
ent
March 2010
Government Jobs Government Jobs During Employment During Employment ContractionContraction
1981
2007
2001
months since employment peak
cum
ula
tive
% c
han
ge
in g
ove
rnm
ent
emp
loym
en
t
1990
Government Jobs Government Jobs During Employment During Employment ExpansionExpansion
cum
ula
tive
% c
han
ge
in g
ove
rnm
ent
emp
loym
en
t si
nc
e tr
ou
gh
1981
1990
2001
2007
Private vs. Government Jobs During Employment Private vs. Government Jobs During Employment Expansion: 2001 vs. 2007 RecessionsExpansion: 2001 vs. 2007 Recessions
cum
ula
tive
% c
han
ge
in
emp
loym
ent
sin
ce
tro
ug
h
2001 Private
2001 Public
2007 Private
2007 Public
Co
ns
truc
tion
4%
Ma
nu
fac
turin
g 9
%
Tra
ns
po
rt & W
are
ho
us
e 3
%
??
? 1
1%
Le
isu
re 1
0%
FIR
E 6
%
W&
R T
rad
e 1
5%
Pro
f & B
us
Se
rv 1
3%
Go
ve
rnm
en
t 16
%
Lo
ca
l Pu
blic
Ed
uc
atio
n 6
%
Job growth by selected industries during Job growth by selected industries during contractioncontraction—expansion phases of the 2007 recession —expansion phases of the 2007 recession
*%= industry’s percentage of overall employment
Since March 2009 initial unemployment claims Since March 2009 initial unemployment claims have been declininghave been declining
… … the average length of unemployment the average length of unemployment seems to have stabilizedseems to have stabilized
Wee
ks
Unemployed ≥ 27 weeks Unemployed ≥ 27 weeks as % of total unemployedas % of total unemployed
Per
cen
tag
e
Improving conditions for job seekers?:Improving conditions for job seekers?:unemployed, job openings, and quitsunemployed, job openings, and quits
2.9*
1.1*
6.7*
1.4*
3.5*
tho
usa
nd
s
Date
*ratio unemployed to openings
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