There is a discussion on the Seeking Alpha of my post on the last Employment Situation Summary issued by the BLS several days ago. Lee Adler asked about the evolution of working age population, WAP, in the U.S. during the past 50 years. This question has arisen because I had shown only the last ten years in the post. These were the years of a steady decrease in the annual increment of the working age population, which is defined as the number of people of 16 years of age and over. Lee is right; the annual increment has two peaks - in the 1970s and between 1998 and 2003 as Figure 1 shows. During the 1980s and 1990s, the increment was at the level of 2,200,000 per year, and in the 2000s it fell from 3,000,000 and more per year to ~2,000,000 per year in 2008 and 2009. One should not trust the peaks in 2000 and 2003. These are caused by one-sided revisions of the total population after the 2000 census. The numbers were corrected after 2000 and 2003 but not before what created severe steps in the WAP.
Figure 2 depicts the evolution of the change rate of the WAP, dWAP/WAPdt or dlnWAP/dt. This is to show that in relative terms (the rate of unemployment and employment-population ratio are defined in relative terms) the current growth of the WAP is not fast from the historical point of view. The 2008 through 2010 values are the smallest since the early 1950s when the aftermaths of the Great Depression and WWII were the most painful. Thus, the current decrease in the growth rate of working age population is one of the reasons behind the slow employment recovery.
Figure 1. Annual increment of the working age population (black line) and its 5-year moving average (red line).
Figure 2. The rate of growth of the working age population (black line) and its 5-year moving average (red line).
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