Free Markets, Free People

December Unemployment

The employment numbers from this morning are no cause for any sighs of relief, yet.  The number of persons employed increased faster than the increase in population–which seems to be unusually small compared to recent months.

In any event, according to my calculation method, this is where we stand (all numbers in thousands):

DECEMBER 2010
Civilian Non-Institutional Adult Population:
238,889
Average Labor Force Participation Rate: 66.2%
Proper Labor Force Size: 158,145
Actually employed: 139,206

UNEMPLOYMENT RATE: 13.6%

The labor force participation rate continues to decline, coming in at 64.3% this month, a 30-year low.  The actual size of the labor force was 153,690.  Using the historical average participation rate of 66.2%, that means the current labor force is running with about 4.45 million fewer workers than it should.

This month’s non-farm payroll increase of 103k new jobs is really just a drop in the bucket. We would need 11 million jobs created to get the unemployment rate back to 5%.  Even if there were no increase in population at all, we would need to create 300k new jobs per month for 37 months to get those 11 million jobs back. The only possible bright spot is that, this year, the first of the baby boomers hit 65 and begin retiring. So maybe the actual labor force participation rate is due to naturally drop, as is the size of the labor force.

All we have to do, then, is figure out how to pay social security to more retirees with a shrinking labor force.  That should be fun.

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11 Responses to December Unemployment

  • Even NPR was reporting this morning that 103,000 new private-sector jobs isn’t enough to keep up with the number of new workers attempting to enter the workforce.

    • Now that the GOP is in the majority in the House, expect to see more such reporting on NPR. If Comrade Nancy were still in charge, NPR would be announcing that this is a bright moment in USA history!

  • Yeah, that’s the ticket …

    We still would have lost the election because we had 9.5% unemployment. Let’s take it where that came from. The policies of George W. Bush and the Republican support for his initiatives, tax cuts are for the wealth, recklessness by some.”

    One wonders why she didn’t blame Climate Change ?

    • The only way to respond to Pelosi is to ask if she were wearing big floppy shoes and a big red nose while making balloon animals.

    • Not too long ago she was blaming the Bush deficits.

  • After reading his prepared remarks on the economy at a window manufacturer on Friday, President Obama sought to take some photos with workers when a pool reporter caught up with him and asked him to explain the connection between the drop in the unemployment rate and the lower-than-expected number of jobs added in December.
    Obama’s response, according to the pool:
    “You know, you’ve got to talk to Austan Goolsbee. That’s his job.”
    Obama then posed for some photos.

    “Present !!”

  • I do think we are going to see the participation rate go down as us boomers retire.  There is still the baby bust coming on, too.

    • Thing is, boomers are NOT retiring in the numbers expected, are they?
      Seems whole lots of them are staying in the workforce into their late 60’s and even beyond. Some of that is due to economics, and others that feel they still have what it takes and are not ready to fold up. In ages past, people engaged in physical/manual labor HAD to retire early; that’s not true at all any more.
       

  • This month’s non-farm payroll increase of 103k new jobs…

    “New” jobs, or just resurrection of old jobs that had previously been cut?  To my thinking, a “new” job is one that is created on top of a stable and growing job s in existence.
    When I was a project manager, many “new” projects my teams worked on were merely old ones that been been canceled or postponed, then brought back out of cold storage.
    And how much of purported “…current GNP growth” is comprised of those facets that are not private sector but rather government spending/procurement, etc? I remember listening to a radio show featuring a fellow from the Von Mises Institute, perhaps a dozen years ago, reporting how bogus the GNP numbers are in that they double count government spending (which should not be in there in the first place)!!