The Unemployment Rate went up in June

[longknife]

One-tenth of a percent from 3.6 to 3/7.


Golly gee. That’s horrible. The Left has to step in to save our nation. The labor market is weakening.


Oops.


The reason is that more working-age Americans are stepping up and looking for work.

In a time of very low unemployment, bringing more Americans into the workforce is a key to economic growth. It also reflects working conditions and wages becoming more attractive over time, meaning the workforce is very likely happier. That’s hard to measure but increasing workforce participation is one of the best signals we have of worker happiness.

And there’s more room for improvement. The current participation rate is still well below pre-Great Recession levels. That means the expansion may continue for sometime without straining the economy because there are still more workers to be drawn back into jobs.

More @ The Unemployment Rate Went Up for A Good Reason | Breitbart

 

[pinqy]

One-tenth of a percent from 3.6 to 3/7.


Golly gee. That’s horrible. The Left has to step in to save our nation. The labor market is weakening.


Oops.


The reason is that more working-age Americans are stepping up and looking for work.

In a time of very low unemployment, bringing more Americans into the workforce is a key to economic growth. It also reflects working conditions and wages becoming more attractive over time, meaning the workforce is very likely happier. That’s hard to measure but increasing workforce participation is one of the best signals we have of worker happiness.

And there’s more room for improvement. The current participation rate is still well below pre-Great Recession levels. That means the expansion may continue for sometime without straining the economy because there are still more workers to be drawn back into jobs.

More @ The Unemployment Rate Went Up for A Good Reason | Breitbart

The margin of error is +/- 0.2 percentage points. Do a .1 increase is basically no change.

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

 

[pinqy]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop. Not enough people are entering the work force each month to replace the boomers who are retiring. When that happens, labor force participation rate drops, which causes the unemployment rate to decline or stay low.

Demographically, the baby boom generation is the largest. As boomers retire from the workforce, the labor force participation rate declines. The history of the labor force participation rate has been one of increases over time. The first boomers became eligible for social security in 2008. Since that time the labor force participation rate has dropped precipitously. From 1958 to 2000, the labor force participation rate increased every year. In the early 00s, it declined from its peak of 67.3% in 2000 down to 66% in 2008. But since 2008, the labor force participation rate has dropped from 66% down to as low as 62%. Its currently at 62.9%.

The point is that the sudden retirement of the largest generation of people is creating labor shortages across the U.S. economy. This causes the unemployment rate to fall because there are less people in the labor market especially when compared to available jobs. Its a serious problem for employers, but for the time being its wonderful for employees.

Things that could help with this problem like increased U.S. birth rate or increased immigration to the United States are not happening at the moment. The economy can't continue to grow or more importantly grow at the rate people want it to, if there are not a sufficient number of workers. The smaller generations taking over the workforce are struggling to fill the gap that is being left by the Baby Boomers.

Demographics have a massive impact on the country, business's, organizations, the military, and individual people. One that most are not often aware of.

 

[pinqy]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Well, then explain the following articles:

Sure, Unemployment Went Down - Because More People Left The Workforce

Labor participation began declining after a high of 67.3% in mid-2000. It dropped to 66.4% in January 2007, just as the economic collapse began, and kept going. Now the country hovers at just below 63% as people have left the workforce.

Some of that is large college enrollment among Millennials, while another portion has been women leaving the workplace AND BABY BOOM RETIREMENTS.

Whatever the reasons, we seem to have hit a new stable lower number than was the case in the previous 30 years.

More people have given up on finding work and therefore are no longer counted as either working or unemployed. That's why the unemployment rate keeps dropping. It isn't the underlying strength of the economy that reaches all levels of society. The number of jobs might be keeping rough pace with the growth of the population, but that is it. There is no broad economic cheer.

https://www.forbes.com/sites/eriksh...he-number-of-people-working-did/#5fa3e1ee408b

SHRINKING LABOR FORCE EXPLAINS DROP IN UNEMPLOYMENT

https://www.epi.org/news/shrinking-labor-force-explains-drop-unemployment/#


The following is the impact of the baby boom generation on the labor force participation rate:

"The authors track a rising participation rate from about 60 percent in the 1950s and 1960s to a peak of 67 percent at the turn of the 21st century, after which it has been falling consistently, to a low of about 63 percent today. They cite secular (as opposed to cyclical) forces as the main reason for the decline—primarily, the start of retirement for the baby-boom generation. This cohort has exerted a profound influence on the U.S. economy as it has passed through the age distribution. Born during the years 1946 to 1964, baby boomers have “consistently represented the largest fraction of the population,” and their influence is still being felt as they retire, depressing the labor force participation rate."

"Given that the main cause of the falling labor force participation rate is the retirement of the baby boomers, the answer to the question of whether labor force participation will continue to fall depends largely on how long the baby boomers’ rate of retirement will continue to increase. The authors project that, by 2019, the boomers’ retirement rate will have increased by 1.1 percentage points over the 2016 rate, resulting in a corresponding 1.1-percentage-point decrease in the labor force participation rate. Then, the authors expect retirements to keep rising though the 2020s, so that, by the later years of that decade, the participation rate will have declined by approximately 4 percentage points over the 2016 rate. In short, the labor force participation rate of the late 2020s is projected to be about 59 percent, a rate not seen since the 1950s and 1960s, before women began to enter the labor force in increasing numbers."

https://www.bls.gov/opub/mlr/2018/b...falling-us-labor-force-participation-rate.htm

Labor force participation rate today is at 62.9%. But over the next 8 years, its expected to decline to 59%. That will likely keep the unemployment rates low well into the next decade. Were going from and employers market to an employees market. Great for the employee, terrible for the employer.


U.S. job growth surges; unemployment rate drops to 3.6 %

The labor departments closely watched monthly employment report on Friday showed the greater than expected 263,000 new jobs created last month were spread across most industry sectors and the unemployment rate was just 3.6%, the lowest since December 1969. Still wage gains did not accelerate as expected, holding at a reading that is consistent with moderate inflation. Moreover, the decline in the unemployment rate was driven largely by the most people leaving the labor force in a year and a half.

https://www.reuters.com/article/us-...-unemployment-rate-drops-to-3-6-idUSKCN1S9075

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Its easier to soak up the unemployed when there are less people looking for work relative to the number of jobs available. Increasing demand for workers and the retirement of the baby boom generation is creating a shortage of workers relative to the needs of employers. That explains much of the low unemployment numbers the past few years despite less than stellar GDP growth.

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Also, square the above with your own words from September 24, 2012 in the "Gave Up Looking" thread:

" A few times now, the Labor Force has gone down, and that has caused the Unemployment rate (Unemployed/Labor Force) to go down as well."

"In short, the Labor Force dropped, which is not good, causing the UE rate to go down for the wrong reasons."

http://www.usmessageboard.com/threads/gave-up-looking.249379/

 

[pinqy]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Also, square the above with your own words from September 24, 2012 in the "Gave Up Looking" thread:

" A few times now, the Labor Force has gone down, and that has caused the Unemployment rate (Unemployed/Labor Force) to go down as well."

"In short, the Labor Force dropped, which is not good, causing the UE rate to go down for the wrong reasons."

http://www.usmessageboard.com/threads/gave-up-looking.249379/

Poor wording on my part. But note that I wasn’t saying the participation rate caused the UE rate to go down.

What was happening at the time was that both employed and unemployed were dropping, with the number of unemployed dropping faster than the labor force was dropping. I did mention that as a possibility in the last line of my previous post.

What I should have been saying is that when the labor force is dropping because of a drop in unemployment without an increase in employment, then the UE rate goes down, but for the wrong reasons.

But if the labor force drops primarily due to E going down, then the UE rate will go up, and participation rate go down.

 

[pinqy]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Well, then explain the following articles:

Sure, Unemployment Went Down - Because More People Left The Workforce

Labor participation began declining after a high of 67.3% in mid-2000. It dropped to 66.4% in January 2007, just as the economic collapse began, and kept going. Now the country hovers at just below 63% as people have left the workforce.

Some of that is large college enrollment among Millennials, while another portion has been women leaving the workplace AND BABY BOOM RETIREMENTS.

Whatever the reasons, we seem to have hit a new stable lower number than was the case in the previous 30 years.

More people have given up on finding work and therefore are no longer counted as either working or unemployed. That's why the unemployment rate keeps dropping. It isn't the underlying strength of the economy that reaches all levels of society. The number of jobs might be keeping rough pace with the growth of the population, but that is it. There is no broad economic cheer.

https://www.forbes.com/sites/eriksh...he-number-of-people-working-did/#5fa3e1ee408b

SHRINKING LABOR FORCE EXPLAINS DROP IN UNEMPLOYMENT

https://www.epi.org/news/shrinking-labor-force-explains-drop-unemployment/#


The following is the impact of the baby boom generation on the labor force participation rate:

"The authors track a rising participation rate from about 60 percent in the 1950s and 1960s to a peak of 67 percent at the turn of the 21st century, after which it has been falling consistently, to a low of about 63 percent today. They cite secular (as opposed to cyclical) forces as the main reason for the decline—primarily, the start of retirement for the baby-boom generation. This cohort has exerted a profound influence on the U.S. economy as it has passed through the age distribution. Born during the years 1946 to 1964, baby boomers have “consistently represented the largest fraction of the population,” and their influence is still being felt as they retire, depressing the labor force participation rate."

"Given that the main cause of the falling labor force participation rate is the retirement of the baby boomers, the answer to the question of whether labor force participation will continue to fall depends largely on how long the baby boomers’ rate of retirement will continue to increase. The authors project that, by 2019, the boomers’ retirement rate will have increased by 1.1 percentage points over the 2016 rate, resulting in a corresponding 1.1-percentage-point decrease in the labor force participation rate. Then, the authors expect retirements to keep rising though the 2020s, so that, by the later years of that decade, the participation rate will have declined by approximately 4 percentage points over the 2016 rate. In short, the labor force participation rate of the late 2020s is projected to be about 59 percent, a rate not seen since the 1950s and 1960s, before women began to enter the labor force in increasing numbers."

https://www.bls.gov/opub/mlr/2018/b...falling-us-labor-force-participation-rate.htm

Labor force participation rate today is at 62.9%. But over the next 8 years, its expected to decline to 59%. That will likely keep the unemployment rates low well into the next decade. Were going from and employers market to an employees market. Great for the employee, terrible for the employer.


U.S. job growth surges; unemployment rate drops to 3.6 %

The labor departments closely watched monthly employment report on Friday showed the greater than expected 263,000 new jobs created last month were spread across most industry sectors and the unemployment rate was just 3.6%, the lowest since December 1969. Still wage gains did not accelerate as expected, holding at a reading that is consistent with moderate inflation. Moreover, the decline in the unemployment rate was driven largely by the most people leaving the labor force in a year and a half.

https://www.reuters.com/article/us-...-unemployment-rate-drops-to-3-6-idUSKCN1S9075

Nothing in there contradicts anything I said. None of your cites claimed a falling participation rate caused a drop in the UE rate.

A dropping labor force will cause the participation rate to drop. IF the drop also includes a large number of UNemployed, then the UE rate will drop as well (if the unemployment level tdrops faster than overall labor force) But otherwise you can certainly have increasing participation rate and rising unemployment rate. Look at the early 1980’s: that’s exactly what happened.

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Well, then explain the following articles:

Sure, Unemployment Went Down - Because More People Left The Workforce

Labor participation began declining after a high of 67.3% in mid-2000. It dropped to 66.4% in January 2007, just as the economic collapse began, and kept going. Now the country hovers at just below 63% as people have left the workforce.

Some of that is large college enrollment among Millennials, while another portion has been women leaving the workplace AND BABY BOOM RETIREMENTS.

Whatever the reasons, we seem to have hit a new stable lower number than was the case in the previous 30 years.

More people have given up on finding work and therefore are no longer counted as either working or unemployed. That's why the unemployment rate keeps dropping. It isn't the underlying strength of the economy that reaches all levels of society. The number of jobs might be keeping rough pace with the growth of the population, but that is it. There is no broad economic cheer.

https://www.forbes.com/sites/eriksh...he-number-of-people-working-did/#5fa3e1ee408b

SHRINKING LABOR FORCE EXPLAINS DROP IN UNEMPLOYMENT

https://www.epi.org/news/shrinking-labor-force-explains-drop-unemployment/#


The following is the impact of the baby boom generation on the labor force participation rate:

"The authors track a rising participation rate from about 60 percent in the 1950s and 1960s to a peak of 67 percent at the turn of the 21st century, after which it has been falling consistently, to a low of about 63 percent today. They cite secular (as opposed to cyclical) forces as the main reason for the decline—primarily, the start of retirement for the baby-boom generation. This cohort has exerted a profound influence on the U.S. economy as it has passed through the age distribution. Born during the years 1946 to 1964, baby boomers have “consistently represented the largest fraction of the population,” and their influence is still being felt as they retire, depressing the labor force participation rate."

"Given that the main cause of the falling labor force participation rate is the retirement of the baby boomers, the answer to the question of whether labor force participation will continue to fall depends largely on how long the baby boomers’ rate of retirement will continue to increase. The authors project that, by 2019, the boomers’ retirement rate will have increased by 1.1 percentage points over the 2016 rate, resulting in a corresponding 1.1-percentage-point decrease in the labor force participation rate. Then, the authors expect retirements to keep rising though the 2020s, so that, by the later years of that decade, the participation rate will have declined by approximately 4 percentage points over the 2016 rate. In short, the labor force participation rate of the late 2020s is projected to be about 59 percent, a rate not seen since the 1950s and 1960s, before women began to enter the labor force in increasing numbers."

https://www.bls.gov/opub/mlr/2018/b...falling-us-labor-force-participation-rate.htm

Labor force participation rate today is at 62.9%. But over the next 8 years, its expected to decline to 59%. That will likely keep the unemployment rates low well into the next decade. Were going from and employers market to an employees market. Great for the employee, terrible for the employer.


U.S. job growth surges; unemployment rate drops to 3.6 %

The labor departments closely watched monthly employment report on Friday showed the greater than expected 263,000 new jobs created last month were spread across most industry sectors and the unemployment rate was just 3.6%, the lowest since December 1969. Still wage gains did not accelerate as expected, holding at a reading that is consistent with moderate inflation. Moreover, the decline in the unemployment rate was driven largely by the most people leaving the labor force in a year and a half.

https://www.reuters.com/article/us-...-unemployment-rate-drops-to-3-6-idUSKCN1S9075

Nothing in there contradicts anything I said. None of your cites claimed a falling participation rate caused a drop in the UE rate.

A dropping labor force will cause the participation rate to drop. IF the drop also includes a large number of UNemployed, then the UE rate will drop as well (if the unemployment level tdrops faster than overall labor force) But otherwise you can certainly have increasing participation rate and rising unemployment rate. Look at the early 1980’s: that’s exactly what happened.

I never said that with an increasing participation rate one would not see a rise in unemployment. That's in fact my point. Every month when these articles talk about the unemployment rate coming out, often if there is a drop in the unemployment rate, it is explained as more of the fact that labor force participation rate declined because people left the workforce for whatever the reason. Example , the unemployment rate dropped from 4.9% to 4.8%, but that was because labor force participation went down from 64.2% to 64% as people left the workforce for whatever reason. Along the same lines you will see that "this month unemployment rose from 4.2% to 4.3% as more workers entered the labor force pushing the labor force participation rate up to 63.2."

I never said that you can't get a rise in unemployment when the labor force participation rate is falling. But the main feature of the last 10 years has been declining labor force participation rate because the retirement of the baby boom generation. This is listed by many as one of the main factors in the drop in the unemployment rate over the last 10 years. The prediction right now is that the labor force participation rate will fall to 59% in the next 8 years because of baby boom retirement. This will likely help keep the unemployment rate low.

I don't know if this is simply a mix up of wording on my part or poor reading comprehension, but I've seen dozens of articles discuss the decline in labor force participation coinciding with a decline in the unemployment rate and the drop in unemployment being highlighted as not a true drop in unemployment because of the drop in the participation rate due to people leaving the workforce. But then good news comes when the unemployment rate goes up just as the participation rate goes up because more people entered the workforce.

I've also seen it be said that were entering an employees market instead of an employers market due to the retirement of the baby boom generation. With massive numbers of people leaving the work force each year due to retirement, employers have a tougher time filling positions and are dipping into the pool of "unemployed people" reducing it. I think you suggested that this is not the case though.

 

[U2Edge]

Part of the reason why unemployment is low as well as the labor force participation rate is because of the continuing retirement of the baby boom generation from the work force. The Baby Boom Generation consist of people who were born in the years 1946 to 1963.

Retirement would have no effect on the unemployment rate. Well, theoretically it could make it larger, but that’s unlikely. But I don’t see how you think it could make it smaller.

When the labor force participation rate drops, it causes the unemployment rate to drop.

No it doesn’t

Ok...P=population
U=unemployed
E=employed
L=Labor force

L = U+E
Participation rate = L/P = (U+E)/P
Unemployment rate = U/L = U/(U+E)

So, if the population increases faster than the labor force, which includes the labor force going down, then the participation rate goes down. If the labor force goes up faster than the population, then the participation rate goes up.

But the change in population has no effect on the unemployment rate: only the relationship between employment and unemployment.

The UE rate, then, can go up or down or stay the same regardless of what the participation rate does.

Retirement: that’s negative pressure on employment. So if enough people retire, that could cause employment to go down. But let’s say the number of employed stay the same.
Again: UE rate = U/(U+E)
So if E goes down, but U stays the same, then the UE rate goes up.

But there’s no way E going down can make the rate go down. U would have to go down faster.

Also, square the above with your own words from September 24, 2012 in the "Gave Up Looking" thread:

" A few times now, the Labor Force has gone down, and that has caused the Unemployment rate (Unemployed/Labor Force) to go down as well."

"In short, the Labor Force dropped, which is not good, causing the UE rate to go down for the wrong reasons."

http://www.usmessageboard.com/threads/gave-up-looking.249379/

Poor wording on my part. But note that I wasn’t saying the participation rate caused the UE rate to go down.

What was happening at the time was that both employed and unemployed were dropping, with the number of unemployed dropping faster than the labor force was dropping. I did mention that as a possibility in the last line of my previous post.

What I should have been saying is that when the labor force is dropping because of a drop in unemployment without an increase in employment, then the UE rate goes down, but for the wrong reasons.

But if the labor force drops primarily due to E going down, then the UE rate will go up, and participation rate go down.

I never suggested that the raw number of people employed has been dropping, in fact it increases every year or generally has increased every year in recent history. I believe the nominal figure has increased almost every year from 148 million in 2006 to 160 million in 2017 and is anticipated to rise to 167 million by 2026. But with the retirement of the baby boom generation, it forces employers to dip into the unemployed ranks to help fill the jobs that are out there which is steadily increasing. This situation makes it easier for the employee to find a job. It lowers the unemployment rate, makes it tough for the employer to fill jobs.

 

[gipper]

Agree on all points.

What I find interesting is it seems many employers are forcing boomers into retirement by termination. This is purely anecdotal but I know of many people in their late fifties to early sixties, who have lost their jobs. I wonder what percentage of boomers are forced to retire rather than chose to.

I can understand employers wanting younger workers but finding them in this environment, must be difficult.

 

[U2Edge]

Agree on all points.

What I find interesting is it seems many employers are forcing boomers into retirement by termination. This is purely anecdotal but I know of many people in their late fifties to early sixties, who have lost their jobs. I wonder what percentage of boomers are forced to retire rather than chose to.

I can understand employers wanting younger workers but finding them in this environment, must be difficult.

Being forced to retire from a business or company does not necessarily mean the individual leaves the workforce. That forced out manager may now be a limo driver. I think this was more common back in 2009-2010 at the height of unemployment due to the recession. I think discrimination by employers for any reason is much less now and looks like it will be much less in the near future due to the labor shortages. If your struggling to find employees, age is less of a factor. I see a lot of fast food joints employing people under the age of 16 or over 65, especially on the weekends. I walked into a McDonalds a couple of weeks ago and did not see anyone that looked older than age 12 working there which was a shock.

Another interesting thing is that the baby boom generation has I believed retired at a slower rate than other generations. So although the retirement of the baby boom generation has impacted the labor market, the impact would be larger if they were retiring at the rate previous generations did. The percentage of people still working over age 65 continues to increase.

The United States is also likely to elect Joe Biden as the next President who will turn 78 just days after the November 3, 2020 election. If Joe Biden serves a full two terms, he won't leave the office of President until age 86.

 

[longknife]

All of this negativity about people leaving the workforce omits the fact that 1 in 4 seniors have no desire to retire. (See my post on the subject)

 

[U2Edge]

All of this negativity about people leaving the workforce omits the fact that 1 in 4 seniors have no desire to retire. (See my post on the subject)

Yes that is very true. Baby Boomers are leaving the work force at a much slower rate than past generations. But the Baby Boom generation is so large that the retirements that are happening are having a big impact on the labor force and employers. Great time to be an employee hunting for a new job.