Letter to the Editor

AP employment story leaves out information

Tuesday, May 10, 2022

Dear Editor,

The Friday 6 May 2022 AP article on employment is correct that the US economy added 428,000 jobs during April 2022. The story is only half the picture however. The 3.6% unemployment rate given in the story is the U3 and is defined as the unemployed actively seeking a job. Another unemployment rate is the U6 which is the U3 plus those discouraged, underemployed (not getting as many hours of work as wanted) or working part-time when they want full-time employment. The U6 discouraged workers are those that have looked for work in the past 12 months but not found it. The U6 is considered by most economists as the more accurate unemployment rate. Even the U6 could be a little misleading.

Another number not in the AP story is the labor participation rate.

This is the percentage of non-institutionalized people age 16 and older employed or actively seeking work.

Now that we know what the Bureau of Labor (BLS) reports monthly, let’s look at a few of the numbers not in the AP story. The U6 for April 2022 was down 0.6% from the previous month. But the labor participation rate is dropping, which means a smaller percentage of people are working.

The April 2022 labor participation rate was 62.2%, down from the recent pandemic peak of 62.4% in March. The labor participation rate declined from the beginning of 2002 till around April of 2016, at that point it remained flat for many months beginning to rise in October 2018 to ahigh of 63.4% till the pandemic hit a little over 2 years ago.

There are reports that the US has between 5 and 11 million openings today. So let’s look at a few more numbers for the US labor force.

There are 5.941 million unemployed persons in the US according to BLS data. Job leavers are flat for the past 2 decades while new job entrants are slightly lower than 10 years ago. Also reported were the number of people not in the labor force who want a job, 5.859 million.

A recent low of 4.778 occurred November 2019 completing 7 years of decline.

Even though the labor market has recovered a lot since the lows of the Covid period it still has a way to go. Looking at the full range of data provided by BLS shows it has not fully recovered. Fewer people in the workforce explains some of the supply situation and inflation mentioned by AP, but not all.

Robert Tigner

Nebraska Extension Ag Economist Emeritus

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