Blog Post #1

Analysis of the Labor Market

By Jose Robertson

Every month the Bureau of Labor Statistics puts together a set of data on several aspects of the labor market. This essential data can be analyzed by three major statistics, which are the unemployment rate, employment population ratio, and the labor force participation rate. All of these mentioned before allow the American public to understand the current state of the labor market, to study past trends, and to make predictions about the future regarding the position of the labor force in the United States.

To begin with, it is important to understand where the set of data gathered by the Bureau of Labor Statistic (BLS) comes from and the definition of the three major statistics. The BLS collects the data from a survey called the Current Population Survey (Mankiw, 2015). Based on the answers provided by the population the BLS classifies the labor force as the sum of the employed and the unemployed, not including individuals who ceased their job search (Mankiw, 2015). In other words, the labor force is the number of people either working or actively seeking a job.  After the labor force is determined the BLS proceeds to calculate the Unemployment Rate, defined as the percentage of the labor force that is unemployed (Mankiw, 2015). The labor force participation rate is the percentage of the population that is either working or actively seeking job in the entire population 16 years old and over (“How the Government Measures Unemployment”, 2014). Finally, the employment population ratio is the percentage of the population (16 years old and over) that is currently working (“How the Government Measures Unemployment”, 2014). Knowing these three statistics allow anyone to clearly analyze the information and understand what is going on in the labor market.

The November 2015, employment situation provided by the Bureau of Labor Statistics reported no alterations in the unemployment rate, as it remained held at 5.0 percent. This is encouraging as the unemployment rate was at 7.0 percent in November 2013. Regarding the different worker groups in the United States’ economy there was little or no change showed in November. The little changes occurred in the different ethnic groups as African Americans, Asians, and Hispanics’ unemployment rates somewhat increased while the unemployment rate for Whites slightly decreased (The Employment Situation, 2015). By analyzing Chart 1 provided by the Bureau of Labor Statistics one could anticipate the unemployment rate to remain unchanged or to slightly decrease in 2016. The employment population rate showed no fluctuation in Novembers as it was at 59.3 percent and has shown little movement since October 2014 (The Employment Situation, 2015). This rate can be projected to stay flat in 2016 since it hasn’t shown a considerable change regarding 2014. Also, the civilian labor force participation rate changed in November to 62.5 percent in comparison to the previous month, which recorded 62.4. This .1 percent represents an increase in the labor force by 273 individual (The Employment Situation, 2015). Like the two previous statistics analyzed before, the civilian labor force participation rate will remain stable during 2016 unless they are affected by a policy change applied by the government.

References

U.S. Bureau of Labor Statistics. (2015, December 4).The Employment Situation- November 2015. In Bureau of Labor Statistics. Retrieved from http://www.bls.gov/news.release/pdf/empsit.pdf

U.S. Bureau of Labor Statistics. (2014, June). How the Government Measures Unemployment. In Bureau of Labor Statistics. Retrieved from http://www.bls.gov/cps/cps_htgm.pdf

Mankiw, N. Gregory. (2015). Principles of Macroeconomics. (7^th ed.). Stamford, Connecticut: Cengage Learning.