Forget ‘Labor Force Participation Rate’ … here’s the indicator to watch
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It’s no secret that the Labor Force Participation — the % of able bodied adults who are employed or looking for work — has dropped about 4-1/2 percentage points .
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The economy-is-doing-just-fine crowd chalks the declining rate to demographics – old-timers retiring.
In prior posts I’ve attributed about 1/3 to retirees … the rest to slackers.
To that point, let’s cut the data a different way …
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I stumbled on another Fed data series – the Inactivity Rate.
The inactivity rate is the percentage of able bodied adults who are neither employed nor looking for work
The number-crunchers even report the activity rate by sex and age category.
Below is the Inactivity Rate for men between 25 and 54.
That takes out teens and retirees.
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Note that during the Bill Clinton years the inactivity rate among 25 to 54 year old men held relatively constant at about 8.5% .
The rate jumped a point during the Bush years to 9.5%.
During these recent all-is-well days, the rate hopped a northeast trajectory to its current rate – just under 12%.
That’s almost 12% of our 25 to 54 year old able-bodied men kicking back without a job.
They are either unemployed … or out of the labor force (i.e. not even looking).
Smoking economy, right?
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