It’s year end and time for some perspective on the economy.

Let’s start with the U.S. labor market.

The employment to population ratio remains stuck at around 58.7 percent,  levels not seen since the mid-1980′s.  This  is due to both structural factors, such as demographics and an increase in the population on disability,  as well as cyclical influences.

 

Dec26_Jobs3

Nonfarm payrolls have grown, on average, 154K per month in the first 11 months of 2012, down from 175K per month, last year.

 

Dec26_Jobs2

The private sector has recovered about 58 percent of the 8.833 million jobs lost during the Great Recession.  The goods producing sector, mainly, construction and manufacturing sectors,  were hit disproportionately hard and have yet to fully recover.   Construction, for example, is operating at only 74 percent of December 2007 levels.   Hopes are high for construction hiring as the U.S. housing market recovers.

Conversely,  the private service producing sector has fully recovered though with a much  different profile and, unfortunately, in lower wage industries.

 

Dec26_Jobs1

Source:  Joint Economic Committee,  U.S. Congress

 

(click here if charts are not observable)

Category: Economy, Employment, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Perspectives on the U.S. Labor Market”

  1. rd says:

    It is not an accident that the peak labor force participation occurred in the 90s and early 2000s. That is the period of time when the heart of the Baby Boom was in their 40s and early 50s. At that point, the kids are at least in high school, they would still be in good health etc. and both would be able to work. They were also in their peak earning years and most productive for employers.

    This was also a major factor in house prices rising as they did since the two-income households could clearly buy more house so demand went up and McMansions popped up around the country. The two go hand in hand – lower house prices and lower interest rates now reduce the need to have high incomes from double incomes to afford a house. At the same time the aging Boomers are moving past peak earning years, so spending power is down and will be down going forward for a while.

    However, this too shall pass over the coming decade or so and then new generations will take over and be the economic driving force.