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Economics for your Classroom fromEd Dolan’s Econ Blog
US Private Sector JobsGrow at Fastest Pace since
Dot.Com BoomFeb 7, 2015
Terms of Use: These slides are provided under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics, from BVT Publishing.
Strong Upward Revisions Add to Job Gains
The economy added a robust 257,000 payroll jobs in January 2014, according to a preliminary report from the Bureau of Labor Statistics
Upward revisions added 147,000 jobs for November and December, in addition to strong gains already reported
Smaller revisions for earlier months reflect annual “rebenchmarking”
February 7, 2015 Ed Dolan’s Econ Blog
Fastest Private Job Growth Since Dot.Com Boom
Over the 12 months since January 2014, the economy added 3,127,000 new private sector jobs
That was the fastest 12-month rate of job creation since the dot.com boom of the 1990s
Over the course of the year, total government jobs decreased by 80,000
February 7, 2015 Ed Dolan’s Econ Blog
Unemployment Rate at 5.7 Percent
The US unemployment rate rose fractionally to 5.7 percent in January, remaining near its low for the recovery.
The unemployment rate is the ratio of unemployed persons to the labor force. The labor force grew by 1,051,000 for the month. The number of employed persons increased by 759,000 and the number of unemployed increased by 291,000
The household survey on which unemployment data are based uses a different methodology from the establishment survey of payroll jobs
February 7, 2015 Ed Dolan’s Econ Blog
Broad vs. Standard Unemployment Rate
The BLS also provides a broader measure of job-market stress, U-6
The numerator of U-6 includes Unemployed persons Marginally attached persons who
would like to work but are not looking because they think there are no jobs, or for personal reasons
Part-time workers who would prefer full-time work but can’t find it
The denominator includes the labor force plus the marginally attached
U-6 rose to 11.3 percent in January, near its low for the recovery
February 7, 2015 Ed Dolan’s Econ Blog
Long-term Unemployment
Signs of slack in the labor market remain, including a level of long-term unemployment that has remained very high by historical standards
In January 2014, 31.5 percent of all unemployed workers had been out of a job for 27 weeks or longer
February 7, 2015 Ed Dolan’s Econ Blog
Involuntary Part-Time Workers
Another sign of slack is the large number of people working part time “for economic reasons,” that is, because they can only find part-time work or because their employers have cut their hours due to slack demand
The percentage of the labor force working part time for economic reasons fell to a new low for the recovery in January, but it remains higher now than it was before the Great Recession began
February 7, 2015 Ed Dolan’s Econ Blog
The Bottom Line: Labor Market Strong but Room to Grow
The labor market is improving strongly and, by some indicators, is approaching levels consistent with the Fed’s mandate to maintain “maximum employment”
However, low inflation and broader indicators of job slack suggest that there is no hurry to tighten policy. Significant room for growth remains.
February 7, 2015 Ed Dolan’s Econ Blog
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