March 23, 2023

Economix: The Employment Rate

Spare a moment for an overlooked economic indicator: The employment rate.

The government said Friday that 58.5 percent of Americans over the age of 16 had jobs in March.

This employment rate has held remarkably steady since 2010, never higher than 58.7 percent or lower than 58.2 percent. Job creation has basically kept pace with population growth. Nothing more. The share of Americans with jobs is still stuck about 5 percentage points lower than before the recession.

Source: Bureau of Labor Statistics

This may seem surprising. After all, the unemployment rate — the labor market indicator that gets all the attention — has fallen from 9.8 percent to 7.6 percent over the same three-year period.

It’s only surprising, however, because people tend to treat the unemployment rate as an inverse of the employment rate. But notice that the two numbers do not sum to 100 percent. About 34 percent of Americans are missing: People who don’t have jobs, and are not actively looking.

Some of those people are retired or disabled. Some are stay-at-home parents. And some of them have stopped looking for work because they have given up hope of finding work. The government estimates membership in each of these groups. It is clear, for example, that a growing share of Americans is elderly. But it is impossible to know how many 66-year-olds would return to work if jobs were available, or how many parents would put children in day care if they could earn enough to cover the cost.

The unemployment rate treats all of these people as invisible. The employment rate treats them all as potential workers. The truth surely lies in between: It has become a little easier, but not much, to find work if you want it.

Article source:

Reports on Jobs and Consumer Confidence Lift Stock Market

The stock market moved solidly higher on Thursday, with the Standard Poor’s 500-stock index scoring its best day in seven weeks, as bullish reports on consumer confidence and private sector jobs encouraged investors.

Data from the payrolls processor A.D.P. showed that American companies added 158,000 workers in October, the fastest pace in eight months. In another encouraging sign, consumer confidence jumped in October to its highest level in more than four years, the Conference Board said.

The numbers showed a slightly more positive picture of the American economy a day before Friday’s employment report from the Labor Department, the most widely watched United States economic indicator.

“In all, it bodes well for the bull side, and finally gave some investors a catalyst to buy,” said Alan Lancz, president of Alan B. Lancz Associates, an investment advisory firm in Toledo, Ohio. “Tomorrow will be more of a trump card and can take it all away.”

Employers are expected to have added 125,000 jobs to nonfarm payrolls in October, up from 114,000 in September, according to a Reuters survey of economists. The unemployment rate is forecast to have inched up to 7.9 percent after a sharp drop to 7.8 percent in September.

The Dow Jones industrial average gained 136.16 points, or 1.04 percent, to close at 13,232.62 The S. P. 500 shot up 15.43 points, or 1.09 percent, to finish at 1,427.59, its biggest daily percentage gain since Sept. 13, when the Federal Reserve unveiled its plan for a third round of economic stimulus. The Nasdaq composite index jumped 42.83 points, or 1.44 percent, to 3,020.06.

Pfizer fell 32 cents, or 1.3 percent, to $24.55 after it reported revenue that fell far short of expectations.

Exxon Mobil, the world’s largest publicly traded oil company, which like Pfizer is a Dow component, gained 43 cents, or 0.5 percent, to $91.60. The company reported a quarterly profit that slipped from a year earlier, although it still topped expectations. Exxon’s oil and gas output, however, declined more than expected.

In after-hours trading, Starbucks rose $3.54, or 7.6 percent, to $50.16 after it reported a higher quarterly profit and raised its full-year forecast. The stock closed regular trading at $46.62.

During the regular session, official and private sector factory surveys in China that showed the world’s second-biggest economy regaining some traction added to support for stocks.

The JDA Software Group, a maker of supply-chain management software, soared $6.61, or 17.3 percent, to $44.76. The company agreed to a cash buyout by a privately held rival, RedPrairie, with a value of about $1.9 billion.

In the bond market, interest rates moved higher. The price of the Treasury’s 10-year note fell 13/32, to 99 2/32, while its yield rose to 1.73 percent, from 1.69 percent late Wednesday.

Article source: