Free Markets, Free People

Economic Statistics for 6 Mar 15

The labor department reports that 295,000 net new jobs were created in January, as the unemployment rate fell from 5.7% to 5.5%. The labor force participation rate slipped -0.1% to 62.8% as 178,000 people left the labor force. Average hourly earnings rose 0.1%, while the average workweek remained unchanged at 34.6 hours. The U-6 unemployment rate, the broadest measure of labor utilization, fell from 11.3% to 11%. Normally, at this point, I would calculate the “real” unemployment rate based on the historical labor force participation rate of 66.2%. Well, I’m not going to do that any more. Labor force participation has been declining steadily for the past 15 years, so I’m no longer sure what the “real” labor force participation rate should be. Below is labor force participation since 1960.

Labor force participation rate since 1960

Lower oil prices narrowed the US Trade deficit from $-46.6 billion in December to $-41.8 billion in January.

Consumer credit rose $11.6 billion in January, but revolving credit fell $1.1 billion. Credit increases mainly came from auto financing and the government’s acquisition of student loans. 


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3 Responses to Economic Statistics for 6 Mar 15

  • A thought regarding labor force participation…

    My old man is in his early 60’s, and as such is a Baby Boomer. Could this steady decline in labor participation be a factor of that large population bulge leaving the labor force from retirement?

    • No, the retirees leave the denominator, too.

      • Not necessarily, Thales.

        According to this site, the Labor Force Participation rate is calculated based on the number of people over 16 who are not institutionalized. By my reading, people who are retired but not in elderly care facilities are part of the labor force, but are considered non-participants. So, they would still be in the denominator.

        Perhaps I’m wrong, but it seems that baby boomers retiring accounts for part of the decline, even if it doesn’t account for all of it.