Laura Kielek
Dr. Kassens
Econ 122
18 April 2014
The March
Employment Situation Report discusses important labor market statistics, which
includes the unemployment rate, employment population ratio, and labor force
participation rate (“The Employment Situation,” 2014). The Bureau of Labor
Statistics (BLS) measures unemployment, and every month the BLS provides data
to the public on unemployment and on other aspects of the labor market, as well
(Mankiw, 2012, p. 298).
The
collection of data from this survey is distributed, and the BLS organizes the
information into three separate categories. One category is Employed, which “includes those who
worked as paid employees, worked in their own business, or worked as unpaid
workers in a family member’s business” (Mankiw, 2012, p. 298). Another category
is Unemployed, which “includes those
who were not employed, were available for work, and had tried to find
employment during the previous four weeks” (Mankiw, 2012, p. 299). The third
category is Not in the labor force,
which “includes those who fit neither of the first two categories, such as a
full-time student, homemaker, or retiree” (Mankiw, 2012, p. 299). These
categories are essential for the BLS to compute statistics that will portray
the status of the labor market.
The unemployment rate is calculated
as the percentage of the labor force that is unemployed (Mankiw, 2012, p. 299).
It was unchanged at 6.7% in March of 2014. When comparing March of 2013 to
March of 2014, the rate went from 7.5 to 6.7 (“The Employment Situation,” 2014).
The change of this rate could be because of many reasons, for example, someone
who is unemployed may become discouraged and stop searching for a job. The
unemployment rate would decrease, and it would seem as if the labor market is
improving, but it is not.
The employment population ratio is calculated
as the ratio of the total labor force currently employed to the total
population of a region, municipality, or country (“Employment-to-Population
Ratio,” 2014). This is 58.9% in the month of March 2014. This ratio has hardly
changed when looking at the ratio from March of 2013. It adjusted from 58.5 to
58.9 (“The Employment Situation,” 2014).
The labor force participation rate
is calculated as the percentage of the adult population that is in the labor
force (Mankiw, 2012, p. 299). It is 63.2% in the month of March. This number
seems to stay fairly constant from month to month, as well. Comparing March of
2013 and March of 2014, the labor force participation rate changed from 63.3%
to 63.2% (“The Employment Situation,” 2014).
The changes
that occur from month to month are trends that are likely to continue over the
years. A reason that a drastic change may occur would be a major cut of
employees’ worldwide. Across groups, there a slight differences in unemployment
rates in March of 2014, but also large differences. When comparing adults who
are 16 years and older, between adult men and adult women there is a difference
of 0.5, with men having a larger unemployment rate. Teenagers have the greatest
difference of all, having a 20.9 unemployment rate. When comparing ethnicities
(white, black or African American, Asian, and Hispanic or Latino), white and
Asian have the most similar unemployment rates with white having 5.8 and Asian having
5.4. Hispanic or Latino has a 7.9, and black or African American have the
largest rate of 12.4 (“The Employment Situation,” 2014). These differences
across groups should not exist, but the differences have grown smaller over the
years. Changes in these groups will only continue over years. As for the rest
of 2014, I anticipate that the unemployment rate will not change excessively,
and it will remain around 6.7%. The employment population ratio and the labor
force participation rate will not change too much, as well. These numbers have
all continued to stay rather constant from January to March, so I believe this
trend will continue.
References:
The U.S. Bureau of Labor Statistics. (2014). The employment
situation – March 2014.
(2014). Employment-to-population ratio. Investopedia US, A Division of IAC.
Mankiw, N.G. (2012). Principles
of macroeconomics (6th ed.). Mason, OH: South-Western Cengage Learning.
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