Elvis Choi
Dr. Kassens
Econ 122
December 10, 2015

Bureau of Labor Statistics (BLS) published the report November Employment Situation Report on December 4, 2015. This article is going to talk about the three major labor market statistic of employment in the report: unemployment rate, employment population ratio, and the labor force participation rate.

In general, according to the report, unemployment rate was 5.0 percent in November. Comparing to 2014, unemployment rate decreased from 5.8 percent to 5.0 percent, down by 0.8 percent. (“The Employment Situation-November 2015”, 2015) From the website of Freud, the natural rate of unemployment is about 5.05 percent. Because the actual unemployment rate and the natural unemployment rate are so close, one thing can be strongly considered is the current unemployment doesn’t include cyclical unemployment but mainly consists of frictional unemployment and structural unemployment. (Mankiw, 2012, p. 301). Employment population ratio unchanged, remained at 59.3 percent. Labor force participation rate is slightly changed to 62.5 percent. (“The Employment Situation-November 2015”, 2015) 

For different group’s unemployment rate, those groups which have significant difference are selected.

In category Race, Asian people has the lowest unemployment rate among all other group, at 3.9 percent, lower than the average rate at 5.0 percent. (“The Employment Situation-November 2015”, 2015)

One possible reason is that they are hard-working so that they are more productive and competitive in labor market. Black or African American has the highest unemployment rate among all other group, at 9.4 percent, almost the double of average. (“The Employment Situation-November 2015”, 2015)

The reason why they have such rate maybe they are not treated fairly in the society.

Teenager (16 to 19 years) has the higher unemployment rate, at 15.7 percent, more than the triple of average rate. (“The Employment Situation-November 2015”, 2015)

According to the Mankiw, minimum wage law would be one of the reasons to cause that. In normal market, supply and demand would be adjusted until reaching the equilibrium point such that supply equals demand. But the price of labor cannot go down because of minimum wage law as it should be. As a consequence, supply and demand are not balanced. There are more surplus of supply and some of the teenagers cannot find a jobs. It influences a lot to teenagers as their equilibrium wage should be likely lower then minimum wage because they are not skillful and experienced. (Mankiw, 2012, p. 311) For the disability people, they have a huge increment in unemployment rate, from 10.8 percent 2014 to 12.1 percent 2015 (“The Employment Situation-November 2015”, 2015), a high and rapid boost rate. It is abnormal to observe this result in the situation that average unemployment tends to decrease. It is a very interesting phenomena.

For the same criteria in employment population ratio and labor force participation rate, other groups are chosen.

In category Sexual, women has low employment population ratio (54.0%) and low labor force participation rate (56.8%) than men (65.1%, 68.6%). (“The Employment Situation-November 2015”, 2015) The difference is so obvious. Both of them has more than 10 percent difference. A suggested reason would be women are more often to take the responsibilities of family such that they are not able to work full time.

In category disability people, they have an extremely low employment population ratio (16.8%) and low labor force participation rate (19.2%). (“The Employment Situation-November 2015”, 2015) It is understandable as not all of the disability people are able to work and they are not competitive comparing to others.

For 2016, there are some predictions anticipated below:

Unemployment rate would not decrease as fast as the same speed in 2014 (0.8% per year). (“The Employment Situation-November 2015”, 2015) Because it is very close to the natural rate of unemployment. According to Mankiw, natural rate of unemployment is “the amount of unemployment that the economy normally experiences.” There are always people who are searching job. That’s why natural rate of unemployment is not zero percent. (Mankiw, 2012, p. 298, 305) And in US, it is about 5 percent (FRED Graph - Unemployment rate). Unemployment rate would fluctuate around the natural rate of unemployment so that the difference of unemployment rate between 2015 and 2016 would be smaller.

Labor force participation rate and employment population ratio would remain the same or decline little. The reason why the decline may happen can be found in the report called “Labor force projections to 2024”. (U.S. Bureau of Labor Statistics, 2015) It mentioned that since 2000, the people of baby-boom generation are going to step in their 55 years old or older group. There are a lots of people not in the labor force and as a result the labor force participation rate would probably decrease. At the same time, with the fact that civilian non-institutional population is approximately 0.8 percent per year (Table 1. , 2014), more population and low participation rate causes a bigger decline in employment population ratio, which may occur in 2016.

Reference:

FRED Graph - Unemployment rate. (n.d.). Retrieved December 10, 2015, from https://research.stlouisfed.org/fred2/graph/?g=NxS

Mankiw, N. (2012). Principles of macroeconomics (6th ed.). South-Western.

The Employment Situation-November 2015. (2015, December 4). Retrieved December 10, 2015, from http://www.bls.gov/news.release/pdf/empsit.pdf

Table 1. Projections of the Population and Components of Change for the United States: 2015 to 2060. (2014). Retrieved from United States Census Bureau website: https://www.census.gov/population/projections/files/summary/NP2014-T1.xls

U.S. Bureau of Labor Statistics. (2015, December). Labor force projections to 2024: the labor force is growing, but slowly: Monthly Labor. Retrieved from http://www.bls.gov/opub/mlr/2015/article/labor-force-projections-to-2024.htm

Employment Situation 2015

With the 2015 holiday season parading all throughout the retail world, it is important to keep a close eye on the current trends and patterns in our economic system.  Besides the continuous fluctuation of supply and demand of goods and services, the person that is behind the retail counter or the person that is working on your car or teaching your child is also important to acknowledge in well-rounded predictions about the future trends of the economy.  As production requires working time and human capital, firms and other organizations pay people, providing them with a key component of their income.  The need of production typically intensifies around the holiday season so it is important to be inclusive of employment growth around this time of the year.

Employment growth depends on three factors: population growth, the extent to which the population participates in the labor force, and the extent to which the labor force is employed (Mankiw, 2004).  According to the Bureau of Labor Statistics, “the civilian labor force participation rate, at 62.5 percent, changed little in November. The employment-population ratio was unchanged at 59.3 percent and has shown little movement since October 2014 (“Employment Situation Summary” 2015).”  This reflects an expansion in the labor force as more Americans began searching for jobs (“Employment Situation Summary” 2015).”  Jason Furman the Chairman of the Council of Economic Advisers claims that the, “private-sector employment rose by 197,000 jobs in November (“The Employment Situation in November” 2015).  In result, the economy created 8.1 million jobs over the past thirty-six months, the fastest pace since 2000.  There is a sense of optimism in Furman’s statements when he also claimed that in November the, “unemployment rate held at its lowest level since April 2008 and labor force participation ticked up. We have added more jobs over the past three years than in any three-year period since 2000, and wages are continuing to rise (“The Employment Situation in November” 2015).”  While the Bureau of Labor Statistic resonates with the Furman’s claims in a founding that the number of persons employed part time for economic reasons increased by 319,000 to 6.1 million in November (“Employment Situation Summary” 2015).”     

Another growing number that is occurring the realm of employment is the retail trade.  According to the Bureau, the trend of retail trade continued to grow and has increased by 284,000 over the year.  Particularly in the month of November, job gains occurred in areas such as, “merchandise stores (+12,000) and motor vehicle and parts dealers (+9,000) (“Employment Situation Summary” 2015).”  In addition to the growing market of jobs, the average hourly earnings for all private-sector workers rose 2.3 percent over the past twelve months (“The Employment Situation in November” 2015).  In result, there has been an increase in strong pace of employment growth over the past year. While part time employment has increased from 5,767 of October 2015 to 6,086 in November 2016 alone (“Employment Situation Summary” 2015).  The rise in part-time jobs is also explicable due the fact of seasonal change and surge of business during the holidays. 

So what does this all mean?  Since the employment rate is comprised of various factors, we can take a look at the labor force participation rate to start off.  Perhaps there has been an increase in the American population therefore, creating a wider pool of job markets.  Another possibility is the influence of seasonal activity such as the holidays. More people are looking for some extra money for the holidays therefore, returning or applying into the labor force. This trend can be strongly recognized in the months of December and January when young adults return home from school for their winter break.  A lot of them during the month-long break pick up a temporarily job, typically in retail.  Another component that needs to be recognized is the high-intensified season of production. Since Black Friday deals and other promotional holiday sales are currently taking place, retail stores and website are in need for more capita in order to produce their goods and services to meet the demands of the consumers.  It will be interesting to see how the seasonal adjustments affect the headline number, and how online and in-store sales affect the seasonal adjustments. 

“The Employment Situation in November.” The White House. The White House, Nov. 2015. Retrieved from https://www.whitehouse.gov/blog/2015/12/04/employment-situation-november

“Employment Situation Summary.” U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, Nov. 2015. Retrieved from http://www.bls.gov/news.release/empsit.nr0.htm

Mankiw, N. Gregory. Principles of Macroeconomics. Mason, OH: Thomson/South-Western, 2004. Print.

“November Jobs Report: Everything You Need to Know.” MoneyBeat 2015. Retrieved from http://blogs.wsj.com/moneybeat/2015/12/04/november-jobs-report-everything-you-need-to-know-2/

Analysis of Japan

Blog #2

Rui Yamamoto

There are many developed countries in the world and Japan, which is my home country, is one of them. I lived in Japan at least 19 years and learned a lot of things. However, after I came to Roanoke College, I realized that I didn’t know much about Japan. Therefore, to know more about my home country, I choose Japan as my researching objective. By using the UN Comtrade data, I will discuss the general trading patterns and analyze the export of commodity ‘84-Nuclear reactors, boilers, machinery, etc’ of Japan.

                First topic is about the general trading patterns of Japan. According to the data from UN Comtrade, three biggest imported commodities are ‘27-Mineral fuels, oils, distillation products’, ’84-Nuclear reactors, boilers, machinery, etc’ and ’85-Electrical, electronic equipment’ and three biggest exported commodities are ‘84-Nuclear reactors, boilers, machinery, etc’, ’87-Vehicles other than railway, tramway’ and ‘85-Electrical, electronic equipment’ (UN Comtrade Demo, n.d.). Interesting point is that there is no significant change in both imported and exported commodities from the past. This may be because the economy of Japan is already stable and there was no need to make change in Japanese industry. One big characteristic of import is that the proportion of ‘27-Mineral fuels, oils, distillation products’ is really big. This is because there is almost no place that gases or oils are deposited in Japan. However, there are many companies and the dependence of thermal power is strong, so Japan needed to import a lot of oils from other countries. What about the countries which have strong connection with Japan. According to the UN Comtrade data, three big importing countries of Japan are China, United States and Australia and three big exporting countries are China, United States, and South Korea (UN Comtrade Demo, n.d.). From this information, we can see that Japan has a strong connection with China and United States. Also, there is interesting trend in both total amount of import and export. Although both of them are basically increasing, there is a drop in 2009 and 2013 (UN Comtrade Demo, n.d.). It is easy to explain the one in 2009 because there was a great recession in 2008 and almost all of the countries, including Japan, experienced bad economies. How about the drop in 2013? One of the keys is the ‘84-Nuclear reactors, boilers, machinery, etc’.

Japan’s biggest export commodity is ‘84-Nuclear reactors, boilers, machinery, etc’. The commodity is always on the top export very year. However, in 2012 a great earthquake occurred in Japan and consequently nuclear power plants in Fukushima melted down by a tunami. After the disaster, Japan stopped many nuclear power plants. According to one chart, the amount electricity produce by nuclear power in 2010 was 280 TWh, but in 2013, it dropped to 15 TWh (Nuclear Power in the World Today, 2015). Therefore, the demand for the nuclear power plant disappeared in Japan. Also, some countries started to think that nuclear power plants made in Japan are not safe. As a consequence, the demand for ‘84-Nuclear reactors, boilers, machinery, etc’ made in Japan decreased. Also, because there was no demand for them, Japan decreased amount of importing ‘84-Nuclear reactors, boilers, machinery, etc’. With the combination of the earthquake and the decrease in demand of Japanese nuclear power plants, both import and export in 2013 decreased.

I only could look at a data until 2013, but I am quite sure that both import and export of Japan decreased or stay at the same level in 2014 and 2015. Because one of important commodity is losing power, Japan will face serious problem in the future. The important thing is to look at the reality and change a direction of industry in Japan.

One thing I learned form this research is that by looking at the row of data, it is just data. However, by combining it with people’s insight, it will become important and helpful information to understand the world. I think this is important to understand the reality of the world.

References

                Nuclear Power in the World Today. (February, 2015 ). World Nuclear Association. Retrieved from http://www.world-nuclear.org/info/current-and-fu ture-generation/nuclear-power-in-the-world-today/

UN Comtrade Demo. (n.d.). SAS Institute. Retrieved from http://w ww.sas.com/software/visual-analytics/demos/un-comtrade-basic.html

Unemployment

Blog #1

Rui Yamamoto

Unemployment rate is one of the important indicators to discuss the employment situation. This is because we can see the ratio of people who are seeking a job, but cannot find it from the rate. When we consider all of working-age population, we can use two other indicators, which are labor force participation rate and employment-population ratio. From labor force participation rate, we can see the ratio of labor force in the whole working-age population. From employment population ratio, we can see the ratio of people employed in whole working-age population. By combining those indicators, we can see the real situation of the employment. I will discuss the employment statistic from BLS by using them.

According to the data from BLS, unemployment rate is 5.0% and those who are unemployed is 7.9 million, which are basically same number as statistic in October, in November (The employment situation – November 2015, 2015). Also, the change in unemployment rate and those who are unemployed within past 12 months is 0.8% and 1.1million down (The employment situation – November 2015, 2015). We can see a good trend from this information because both unemployment rate and number of those who are unemployed are decreasing. In 2016, both numbers will continue to decrease if nothing happens. However, the chart of unemployment rate from November, 2013 through November, 2015 indicates that although unemployment rate is decreasing, declination of the graph is getting small (The employment situation – November 2015, 2015), which means marginal change is getting small. Therefore, I estimate that the declination will get smaller and smaller, so the decrease of unemployment rate will be small in 2016 compared to past 10 years.

How about labor force participation rate? BLS’s data indicates that labor force participation rate is 62.5% in November and the change of it is very small (The employment situation – November 2015, 2015). By just looking at this information, there is no problem. However, labor force participation rate in November, 2005 is 66% (Labor force statistics from the current population survey, 2015). Therefore, the change of the rate over past 10 years is 3.5% decrease. This is not good trend because the number shows that that number of labor force in whole working-age population is decreasing. By observing the trend, it is estimated that labor force participation rate will be stay at the same level or decrease in 2016.

Employment-population ratio shows almost same trend as the labor force participation rate. According to the BLS’s statistic, employment-population ratio is 59.3 in November and this number is exactly same as the number in October (The employment situation – November 2015, 2015). By looking at older information, the rate in November, 2005 is 62.7% (Labor force statistics from the current population survey, 2015). Therefore, employment-population rate decreased 2.4% over past ten years. Compared to the change in labor force participation rate, the range of decrease is a little bit small, but the trend of employment-population rate is not good. As well as labor force participation rate, it is estimated that employment-population rate will decrease in 2016.

By looking at each indicator, all of it decreases or stays at the same level in November, 2015 and this is not good trend. Also, by combining labor force participation rate and employment population rate, it is possible to say that the entire employment trend is people are losing job, but they are not looking for the job. The possible reason for this is because elder people are started to quit job before retiring age. However, it is unrealistic to conclude the trend with this reason. It seems that we need other indicators to measure what is happening in employment situation.

References

Labor force statistics from the current population survey. (December 6, 2015). Bureau of Labor Statistics. Retrieved from http://data.bls.gov/timeseries/LNS11300000

Labor force statistics from the current population survey. (December 6, 2015). Bureau of Labor Statistics. Retrieved from http://data.bls.gov/timeseries/LNS12300000

The employment situation – November 2015. (December 4, 2015). Bureau of Labor Statistics. Retrieved from http://www.bls.gov/news.release/pdf/empsit.pdf

BLS Employment Situation for November

The Bureau of Labor Statistics (BLS) puts out a monthly report that discusses America’s current employment situation.  This report goes over statistics such as number of people unemployed, unemployed-population ratio, and labor force participation rate. Each of these help give a sense of how our economy is doing in terms of job availability. This post will focus on the findings of the BLS’s December report.

The unemployment rate measures the number of unemployed people compared to the number of people in the Labor Force. The Labor Force is made up of any individual employed or currently searching for employment. In November the unemployment rate stayed at 5.0 percent. A few areas of employment had large increases in employees. Construction rose by 46,000, food and drinking services by 32,000, and retail trade by 31,000 are the leading increases. There was a decline in mining by 11,000 and information by 12,000 as well. These all contributed to the unemployment rate.

The labor force participation rate is the rate at which people are employed or actively searching to employment. This rate did not change from 62.5 percent in November. One of the things that can decrease this percentage is that of discouraged workers. Discouraged workers are workers that are not currently searching for employment because they believe there are no jobs for them. This had no change in November from 594,000. These affect the labor force participation rate because their view on the economy and jobs are taking people out of that labor force.  Also affecting this rate are the people marginally attached to the labor force. These are people who had looked for work within 12 months, but had not in the 4 weeks prior to the survey. This dropped to 1.7 million people in November. These people are not counted within the labor force.

The employment-population ratio is the number of employed people in the labor force divided by the total population of working age. In November this did not change from 59.3 percent. The unemployment rate of 5 percent affects this ratio. The highest number of unemployed individuals was teenagers from 16 to 19 years old at 15,700. This could be caused by there not being an availability of jobs for teenagers or by their lack of experience in jobs.

Within this report, trends and interesting facts can be found. With the winter holidays approaching, it is no surprise that part time jobs for economic reasons increased by 319,000 in November. These are people that would like full time jobs but were unable to find any so they are forced to work part-time. While part time for economic reasons rose to 6.1 million – part time for noneconomic reasons had very little change at 20.2 million. This shows that with the increase of store hours and need for manpower to fuel the holidays that there was an increase in part time job availability. However compared to last year (2014), in November there were 6.9 million part time for economic reasons employed with noneconomic reasons close to current years value at 20 million. While noneconomic jobs are staying consistent between the years, economic reasons had a decrease. These types of trends and views on the report from the BLS help shape our way of thinking about employment and give us insight as to where changes are made and how it affects the labor force as a whole.

Works Cited:

The Employment Situation-November 2015. (2015, December 4). Bureau of Labor Statistics. Retrieved December 7^th, 2015 from, http://www.bls.gov/news.release /pdf/empsit.pdf

December Employment Situation Report Analysis

As stated by November 2015 Employment situation report, the unemployment rate has stayed the same as it was last month at 5.0 percent. This shows that our job market is not drastically improving but that we are not going into a recession because of the constant negative slope. The article stated that even though there was an increase in construction, technical services, and healthcare, there was a decrease in mining and information jobs which causes the unemployment rate to remain unchanged. Looking back to November 2012, the unemployment rate has moved at a generally negative slope from around seven percent unemployed to five percent unemployed, with little fluctuation. Even though it is a negative slope, this shows improvement because the number of people unemployed is shrinking. The number of long term unemployed people has stayed about the same. One way to discover the unemployment rate is to divide the number of unemployed persons by the labor force. The unemployment population ratio is also the same as last month at 59.3 percent. This figure has not drastically changed since October of 2014. You would find the employment population rate by dividing the number of people employed divided by the total, capable working population. The labor force participation rate is very similar to last month at 62.5 percent.This shows that those currently in the labor force last month have generally stayed in the labor force this month.  

From the first page of the Employment Situation for November 2015, chart number one shows the unemployment rate from November 2013 to November 2015. The trend of this graph is that the unemployment rate has been consistently shrinking over the last two years due to the visibly negative slope of the line. If we were to go by the chart, I would anticipate that the unemployment rate would continue to shrink continually because there have been no sharp increases to show otherwise. Logically, another anticipation would be that because we have been in such a long recovery, another recession is somewhere ahead of us so therefore the unemployment rate would increase if we went into another recession. Looking at the summary table A, the total unemployment rate has went down .8 since last year. Also, interestingly enough, the unemployment rate of teenagers (16 to 19 years old) has went from 17.5 percent in November of 2014 to 15.7 percent in November of 2013. This could show that parents may have less extra funds to give to their children making the children need to get a job in order to pay for gas or other necessities. This lack of money that parents can give to children can suggest that even though the unemployment rate has not increased, the cost of living may have gone up which leaves less money for extras. This could anticipate another recession coming soon.

The Employment Situation - November 2015. (2015, December 4). United States Department of Labor. Retrieved December 8, 2015, from http://www.bls.gov/news.release/pdf/empsit.pdf

Employment in 2014

     The unemployment rate, among other statistics, is an important tool used by decision makers in the US economy. This statistic and others like it: the labor force participation rate, and the employment population ratio, can have immediate and lasting effects on an individual in the economy and are therefore very important and should be carefully studied.

     According to the Bureau of Labor Statistics the unemployment rate has slowly climbed since January 2014. Using seasonally adjusted household data one sees a .1% increase from January to March of 2014. This means that .1% of workers lost their jobs and remained unemployed, while still looking for a job, for a prolonged time. With this extra .1% the official over age 16 unemployment rate is fairly stable at 6.7%. This means that 6.7% of the work force have be unemployed for a while, have failed to find a job, and are still looking. This number has far reaching impacts into many areas of the economy but is understated. The 6.7% figure is the U3 number, which fails to take discouraged workers or marginally attached workers into account. If the unemployment rate does not recognize those who have lost hope of finding a job or those who work very few hours then the statistic could be very low and thus misleading. Another measure, the U5 unemployment rate, takes these two factors into consideration. The seasonally adjusted U5 number from January to March of 2014 drops by .1% but holds steady at 8.0% in March. By comparing these two figures one can see that the official unemployment rate is understated by about 1.3%. A change of this size has the potential to alter the choices of decision makers and therefore broader unemployment figures should be equally considered.

     Like the unemployment rate the labor force participation rate is an important indicator of economic performance. This is the percentage of the population that is in the labor force, employed or unemployed. However, this number is only derived from the percentage of the civilian population that is 16 years or older and in the labor force. In March of 2014 this number slightly increased to 63.2%. A BLS table shows that the labor force participation rate has fallen by ~3% since 2004. This means that just less than two thirds of the employable population is in the labor force and this number is slowly dropping. This change could be due to older workers retiring, however, it could also partly be due to workers becoming discouraged and dropping out of the labor force. This figure is immensely important because government programs such as Social Security or Medicare benefit those who are not in the labor force at the expense of those in the labor force. A declining labor force participation rate is alarming because it shows that the ability of the labor force to support those not in the labor force could be in jeopardy.

     A final figure, the employment population ratio, measures the ratio between the employed and the employable population in an economy. This figure is important because it measures the percentage of the population that is able to work that is actually employed. The BLS report states that this figure is 58.9%  for March of 2014. This means that approximately 60% of the employable population is working, or about 40% are not working. This figure has similar applications to the labor force participation rate in that it is important for understanding the ability to maintain government programs like Social Security, Medicare, Medicaid, or various welfare programs. Even if one assumes that the ~40% is entirely composed of retired individuals (which is not probable) this figure calls into question the sustainability of the aforementioned government programs.

     The three statistics mentioned above: the unemployment rate, the labor force participation rate, and the employment population ratio, are all indicators of economic activity that has far reaching effects. The U3 unemployment rate is showing modest increases while conversely the U5 rate is decreasing by the same amount. One would expect that if economic policy is unchanged then the unemployment rate will also remain relatively unchanged and the difference between the U3 and U5 rates will stay around 1-2%. Conversely the labor force participation rate dropped by 3% in 10 years and one expects that this trend will continue if there is no change in policy. One also sees a similar trend in the employment population ratio. These trends promise future economic disaster if not reversed. If policies are left unchanged one expects that the labor force participation rate will drop by another 3% or more in 10 years, and the employment population ratio to also drop by a significant percentage.

Works Cited:

The Empolyment Situation-March 2014. (2014, April 4). Bureau of labor Statistics. Retrieved April 17, 2014, from http://www.bls.gov/news.release/pdf/empsit.pdf

Databases, Tables & Calculators by Subject. (n.d.). Bureau of Labor Statistics Data. Retrieved April 18, 2014, from http://data.bls.gov/timeseries/LNS11300000