Wednesday, July 27, 2016

Jobs and Unemployment Picture

With the Republican and Democratic National Conventions going on we hear a lot about how the candidates will do their best to bring good paying jobs to America. Truth is they can only have a marginal impact on the workforce unless they get through major reforms. And I'm not talking about the normal bill or two loaded with so much pork and fat it'd turn you into a Biggest Loser contestant.

Either way let's take a look at some current job market stats.

Most of what you hear is that there aren't any good jobs available. Hmm that's funny because according to the US Department of Labor Statistics JOLTS report there are actually over 5.5 million jobs available right now! This doesn't even include jobs on the farm such as feeding the cows, taking goat selfies, and baling hay. Better yet is the number of jobs available has been increasing from a recession low of 2.3 million.

So where are a lot of those job openings?  The business and professional sector has seen a lot of activity as expected. This is where you get your good jobs in finance, tech, and engineering. The health and education field is also showing high level of job openings. I'm actually somewhat surprised by the nice upward trends in retail trade, and the accommodation/food sector. But this area isn't known for high paying jobs. The government area has shown stronger growth than I actually expected. I'm guessing a lot of that has been at the federal level without looking deeper. And the laggard has been the construction industry.  It's been no surprise this area of the economy struggled after the recession and only recently has started to pick up hiring.


 If you are wondering about the unemployment picture check out the last two MAD Weekly Reviews here, and here. I'll note that people filing for unemployment is at the lowest level in 45 years! Additionally the number of people on unemployment is lower than before the recession. WHAT!?!?!?

How is that possible since we hear there aren't enough people working?  True the labor force participation rate has been heading lower since a 2000 high of 67% to around 62.5% today.



Also just a quick interesting trend is the historical decline in men compared to the growth of women participating in the labor force the last few decades.


So from this information we can actually glean some interesting data. If we take the total population and the number of people participating in the work force we can get an estimate of how much each working person "produces". The red line is the yearly percentage change in output and it averages 1.93% per year.


Note that despite the job market being "BAD" people are actually producing more than they were before the recession. This is why we see GDP growth, and not labor market growth. Also the average growth rate in output the last 4 years is 2.17%. Above the longer term historical growth rate of 1.93%.

Basically companies and people have figured out how to produce more with less. This is evident by the fact the number of people working in the labor force has held steady pretty much since 2006(see chart below). In other words we are seeing more creative ways to become efficient and produce more.  Robotics, software, and computers are advancing at a pace which seemed unlikely 10-15 years ago. Ever heard of IBM's Watson? Yeah that computer smashed the best jeopardy contestants awhile back and has actually gotten smarter since.  I can recall when McDonald's quietly began testing self order digital kiosks around here.  Of course this happened to be during the first major minimum wage hike uprising a couple years ago. That's just two examples of many.  But the industrial, manufacturing, and service sectors are all figuring out how to use machines even more than humans.

DateLabor Force ParticipationPopulationWorking PopulationReal GDPOutput Per WorkerPercentage Change
1/1/196059.4180671000107,318,5743,108,700,000,000$28,967.03
1/1/196159.3183691000108,928,7633,188,100,000,000$29,267.751.04%
1/1/196258.8186538000109,684,3443,383,100,000,000$30,843.965.39%
1/1/196358.7189242000111,085,0543,530,400,000,000$31,781.053.04%
1/1/196458.7191889000112,638,8433,734,100,000,000$33,151.094.31%
1/1/196558.8194303000114,250,1643,976,700,000,000$34,806.954.99%
1/1/196659.2196560000116,363,5204,239,000,000,000$36,428.944.66%
1/1/196759.6198712000118,432,3524,355,200,000,000$36,773.740.95%
1/1/196859.6200706000119,620,7764,569,000,000,000$38,195.713.87%
1/1/196960.1202677000121,808,8774,712,500,000,000$38,687.661.29%
1/1/197060.4205052000123,851,4084,722,000,000,000$38,126.33-1.45%
1/1/197160.2207661000125,011,9224,877,600,000,000$39,017.082.34%
1/1/197260.4209896000126,777,1845,134,300,000,000$40,498.613.80%
1/1/197360.8211909000128,840,6725,424,100,000,000$42,099.283.95%
1/1/197461.3213854000131,092,5025,396,100,000,000$41,162.54-2.23%
1/1/197561.2215973000132,175,4765,385,400,000,000$40,744.32-1.02%
1/1/197661.6218035000134,309,5605,675,500,000,000$42,256.863.71%
1/1/197762.2220239000136,988,6585,937,000,000,000$43,339.352.56%
1/1/197863.2222585000140,673,7206,267,200,000,000$44,551.322.80%
1/1/197963.7225055000143,360,0356,466,200,000,000$45,104.621.24%
1/1/198063.8227225000144,969,5506,450,400,000,000$44,494.86-1.35%
1/1/198163.9229466000146,628,7746,617,800,000,000$45,133.021.43%
1/1/198264.0231664000148,264,9606,491,300,000,000$43,781.75-2.99%
1/1/198364.0233792000149,626,8806,792,000,000,000$45,392.913.68%
1/1/198464.4235825000151,871,3007,285,000,000,000$47,968.255.67%
1/1/198564.8237924000154,174,7527,593,800,000,000$49,254.502.68%
1/1/198665.2240133000156,566,7167,860,500,000,000$50,205.431.93%
1/1/198765.6242289000158,941,5848,132,600,000,000$51,167.231.92%
1/1/198865.9244499000161,124,8418,474,500,000,000$52,595.862.79%
1/1/198966.4246819000163,887,8168,786,400,000,000$53,612.281.93%
1/1/199066.5249623000165,999,2958,955,000,000,000$53,946.010.62%
1/1/199166.2252981000167,473,4228,948,400,000,000$53,431.76-0.95%
1/1/199266.4256514000170,325,2969,266,600,000,000$54,405.311.82%
1/1/199366.3259919000172,326,2979,521,000,000,000$55,249.841.55%
1/1/199466.6263126000175,241,9169,905,500,000,000$56,524.722.31%
1/1/199566.6266278000177,341,14810,174,800,000,000$57,374.161.50%
1/1/199666.8269394000179,955,19210,561,000,000,000$58,686.832.29%
1/1/199767.1272657000182,952,84711,034,900,000,000$60,315.542.78%
1/1/199867.1275854000185,098,03411,525,900,000,000$62,269.163.24%
1/1/199967.1279040000187,235,84012,065,900,000,000$64,442.263.49%
1/1/200067.1282162411189,330,97812,559,700,000,000$66,337.272.94%
1/1/200166.8284968955190,359,26212,682,300,000,000$66,622.970.43%
1/1/200266.6287625193191,558,37912,908,800,000,000$67,388.331.15%
1/1/200366.2290107933192,051,45213,271,100,000,000$69,101.792.54%
1/1/200466.0292805298193,251,49713,773,500,000,000$71,272.413.14%
1/1/200566.0295516599195,040,95514,234,300,000,000$72,981.082.40%
1/1/200666.2298379912197,527,50214,613,800,000,000$73,983.621.37%
1/1/200766.0301231207198,812,59714,873,800,000,000$74,813.171.12%
1/1/200866.0304093966200,702,01814,830,400,000,000$73,892.63-1.23%
1/1/200965.4306771529200,628,58014,418,800,000,000$71,868.13-2.74%
1/1/201064.7309347057200,147,54614,783,800,000,000$73,864.512.78%
1/1/201164.1311721632199,813,56615,020,600,000,000$75,173.071.77%
1/1/201263.7314112078200,089,39415,354,600,000,000$76,738.702.08%
1/1/201363.3316497531200,342,93715,583,300,000,000$77,783.131.36%
1/1/201462.9318857056200,561,08815,961,700,000,000$79,585.232.32%
1/1/201562.6318857056199,604,51716,348,900,000,000$81,906.462.92%


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