Unemployment Report Shows Little Change From Previous Month

The July employment report shows almost the same results as last month.  The unemployment rate remained the same, 5.3%.  The labor participation rate also did not change from the 62.6% low.  More people dropped out of the labor force than became employed.  While 144,000 dropped out of the labor force, only 101 thousand more became employed.  A month of this sort of statistic wouldn't matter, yet month after month we see the growing size of labor force drop out and the labor participation rate remains depressed.  This low of a labor participation rate has not seen since October 1977 when women and minorities were still were kept out of the labor force extensively.  The report almost looks dead pool, there is so little change from the previous month.


unemployment rate


This article overviews and graphs the statistics from the Employment report Household Survey also known as CPS, or current population survey.  The CPS survey tells us about people employed, not employed, looking for work and not counted at all.  The household survey has large swings on a monthly basis as well as a large margin of sampling error.  This part of the employment report is not about actual jobs gained.

Those employed bumped up by 101,000 this month.  This is within the margin of error yet with the other statistics.  From a year ago, the employed has increased by 2.439 million.


employed levels


Those unemployed decreased by -33,000 to stand at 8,266,000.  From a year ago the unemployed has decreased by -1.382 million.  Below is the month change in unemployed and as we can see, this number typically has wild swings from month to month.




Those not in the labor force increased by 144,000 to 93,770,000.  The below graph is the monthly change of the not in the labor force ranks.  Those not in the labor force has increased by 1,795,000 in the past year.


not in labor force


The labor participation rate stayed at 62.6%, which is no change from last month and a low not seen since October 1977.


labor participation rate


Below is a graph of the labor participation rate for those between the ages of 25 to 54.  The rate is 80.7%, -0.1 percentage point from last month and a value not seen since September 1984, (discounting times past the great recession when the American work experience collapsed).  The labor participation rate cannot be explained away by retiring baby boomers as these are prime working years.


labor participation rate ages 25 to 54


The civilian labor force, which consists of the employed and the officially unemployed, increased by 69 thousand this month.  The civilian labor force has grown by 1,058,000 over the past year.  New workers enter the labor force every day from increased population inside the United States and immigration, both legal and illegal.  The small annual figure implies people are dropping out of the labor force.


civilian labor force


In spite of wild statistical swings, those not in the labor force often grows faster than the population which has the potential to work.  Below is a graph of those not in the labor force, (maroon, scale on the left), against the noninstitutional civilian population (blue, scale on the right). Notice how those not in the labor force crosses the noninstitutional civilian population in growth and the accelerated growth started happening right in 2008.  The increase cannot be explained by retiring baby boomers alone.


not in labor force against population growth


Below is a graph of the civilian labor force, or the official employed plus unemployed, in maroon, scale on left, against those not in the labor force, in blue, scale on right.  Notice how those not in the labor force as a trend exceeded those considered employed and unemployed starting around mid 2009.  Starting in 2014 it has reverted back.  The never ending growing segment of the population that is considered neither employed or unemployed, was above the trend line of those who would be naturally dropping out, such as the retired and those in school.  This showied those not in the labor force was growing much faster than those obtaining jobs and being counted as looking for work.  Not in the labor force figures do include retirees and the size of the population greater than age 65 has grown.


civilian labor force again not in labor force


Those considered employed as a ratio to the total Civilian noninstitutional population now stands at 59.3% and also had no change from last month.  The relationship between the employment-population ratio and the labor participation rate (LPR) is:    employment-population ratio = LPR * (1 - unemployment rate).


civilian pop to employment ratio


Better news was those working part-time for economic reasons declined by -180 thousand for the month.  Those forced into part time work stands at 6,325,000 people.  There are still millions of people who need full-time jobs with benefits who simply can't get them.  The annual decrease by -1.108 million is better news.


part-time workers


There are two categories of those forced into part-time jobs due to economic circumstances.  Those who could only get part-time jobs and those already working who got their hours cut due to businesses not having enough work for them.  The number of people who could only get part-time work is static.  The number decreased only by -3 thousand to 2,213,000 as shown below.



People can also work part-time hours due to slack business demand.  People who got their hours cut due to slack working conditions decreased by -87,000 and stands at 3,828,000.  Below is a graph of forced into part-time work because they got their hours cut, as a percentage of the total employed.   This is a recession economic indicator.


forced part time workers


Part-time workers who are voluntarily working part-time jobs plunged by -589,000 to stand at 19,891,000.  This is probably a good sign even though officially these people want to work part-time.


forced part time workers


U-6 now stands at 10.4% a -0.1 percentage point decrease.  U-6 is a broader measure of unemployment and includes the official unemployed, people working part-time hours because that's all they can get and a subgroup not counted in the labor force but are available for work and looked in the last 12 months.   The U-6 rate still leaves out some people wanting a job who are not considered part of the labor force, so while it is called an alternative rate, but it still ignores those long term hopeless and desperate.  




The long term unemployed, or those unemployed for 27 weeks and over, increased by 59,000 to stand at 2,180,000 people.  From a year ago the long term unemployed ranks has declined 31% and this ratio hasn't changed from last month.  This 986 thousand decline without a corresponding bump up in employed would imply these people are now dropped from the labor force.


long term unemployed


Within the CPS survey is how many people who are considered not in the labor force who report they want a job now.  It is a direct survey question.  The Census asks people who are not being counted in the unemployment statistics and official unemployment rate if they want a job.  The number who answer yes currently stands at 6,135,000, a very large number of people and increased by 59,000 from last month.  Those who are not counted yet report they want a job includes the discouraged workers and marginally attached and is seasonally adjusted.  This figure has decreased -2.7% from a year ago.


not in labor force want a job


The average length of unemployment is 28.3 weeks and a year ago was 33.5 weeks.  This is a 5.2 week drop from a year ago  Also the average time to be unemployed is out of line with the median due to the long term unemployed.  As the long term unemployed drop out of the labor force, this figure drops.


median duration unemployment


The median time one is unemployed, which means 50% of people have gotten a job in this amount of time is 11.3 weeks and did not change from last month.  A year ago the median time to be unemployed was 13.5 weeks.  Notice how both the average and median still diverge.


average duration unemployment


Overall this report just is fairly static, even from a year ago.  The never ending low labor participation rates are still not changing and simply cannot be explained by baby boomers retiring.  Here are our past overviews CPS unemployment statistics, only graphs revised.

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