Unemployment situation

Three simple graphs illustrating the unemployment situation

Figure 1 presents monthly growth in civilian (non-institutional) population (dCP) and in labor force (dLF) between the January 2007 and July 2009. All estimates are obtained in the monthly Current Population Surveys (household data) conducted by the US Census Bureau for the BLS and are seasonally adjusted ones. One can observed three benchmark revisions to the civilian population, which are carried out every January. The estimates of labor force are also affected by the CP revisions. Otherwise, the change in labor force is very volatile. The last three months demonstrate a decrease in the rate of labor force growth from +653 in April to -422 in July. One can expect that the labor force will start to grow again soon.

Figure 1. Monthly growth in civilian non-institutional population (dCP) and labor force (dLF).

Figure 2 compares the change in labor force and in the number of employed people. The latter has also been volatile over the last three years but has clear trends before and after January 2009. These trends are obviously associated with the current recession, with the bottom of the employment market in December 2008. Since January 2009, the number of employed has been decreasing at a decelerating rate. This trend implies that the employment will start to grow in August or September 2009.

Figure 2. Monthly growth in employment (dE) and labor force (dLF).

Figure 3 addresses the change in unemployment. It has been increasing in absolute number since April 2008. However, in July 2009 the unemployment first showed a decrease by 267,000. Considering the long-term behavior of all time series one can make some assumptions about the near future:

The labor force will be growing due to the growth in employment.
The number of unemployed will be decreasing. Due to the increase in the labor force the rate of unemployment will be falling faster than the absolute number of unemployed.

Figure 3. Monthly growth in the number of unemployed (dUE) and labor force (dLF).

No comments:

Post a Comment