Friday, November 22, 2013

Household Survey: Unemployment rate driven down by stagnant workforce, modest employment gains

For the first time since 2010, Colorado's workforce declined year over year during October. According to the Household employment survey for Colorado, released today by the BLS and the Colorado Dept. of Labor and Employment, there were 2.74 million persons in the workforce during October, compared to 2.76 million during October 2013. The first graph shows the work force in each month of each year. We can see that the workforce declined from October 2012, following several years of increases.

Admittedly, the Household survey employs a relatively small sample size, so so let's take a three month moving average instead to smooth things out a little.  The second graph shows the three month movin gaverage in the labor force size. Here we see that  growth is still positive, but is at the lowest level recorded since February 2011. So, it's clear that labor force growth is at the very least weakening, and has possible gone negative in October. 

The third graph simply shows total labor force versus total employment as measured by the household survey. Here, we can note that the labor force size is more or less back to where it was during the the peak of July 2008, and that we also see that total employment remains below that July 2008 peak in employment. Indeed, total employment in this measure is down 56,000 jobs from the peak, or 2.1 percent. This contrasts with the Establishment Survey that shows showed payroll employment at a new high for October. Nevertheless, these numbers suggest some ongoing weakness in the labor market outside the large employers that are measured by the Establishment survey. in this survey there were 2.57 million employed persons during October compared to 2.56 million employed during October 2012. The year-over-year gain was 13,000. 

In the next graph, we can see that the year over year gain of 13,000 was one of the smaller gains in recent years. In the graph we see that the October 2013 employment totals was indeed up from all other October totals since 2009, but also that the gain from 2012 to 2013 was rather small compared to other recent months. 

The fifth graph shows that the three month moving average in total employment through October 2013 was the smallest year-over-year increase in employment since January.

The unemployment rate is calculated by looking at employment as a proportion of those people who want to be employed. The gains in total employment have been modest, but the decline in the labor force helped to push down the unemployment rate during October. As a result, the unemployment rate hit a 58-month low during October,dropping to 6.23 percent from October 2012's rate of 7.35 percent.