Friday, June 03, 2011

US Employment to Population Ratio Depressing Economy

The latest employment data from the Bureau of Labor Statistics (BLS) shows that the US employment to population ratio* stood at 58.5% for May 2011, up from 58.4% the previous month, but down from 58.7% a year ago. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:
Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.
Source: Bureau of Labor Statistics

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Anonymous said...

The chart fails to account for changes in societal norms. The low point is 55.566 in the 1950's but didn't we have full employment because women were not in the work force? And recently there is a delay to entering the workforce due to spending more years in school.

A chart based on % households would be better.

Read you on Califia Beach...

Anonymous said...

One likely cause of the downturn is investor confidence. The longer recovery from the Great Recession lags, the more reluctant are those with money, or who control OPM (Other People's Money), to risk it by hiring. IOW: Being ahead of the herd is risky; those finding themselves there often halt or turn back.

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