Labor force participation rate at 35 year low, State by state, 55 and over record high, WV lowest P2P rate Washington DC highest, CA NV highest underemployment rates
“11.4%: What the U.S. unemployment rate would be if labor force participation were back to January 2008 levels.” …James Pethokoukis, American Enterprise Institute, June 2013
“Nearly half of U.S. companies are reluctant to hire full-time employees because of the ACA. One in five firms indicates they are likely to hire fewer employees, and another one in 10 may lay off current employees in response to the law.
Other firms will shift toward part-time workers. More than 40 percent of CFOs say their companies will consider switching some jobs to less than 30 hours per week or targeting part-time workers for future employment.”…Duke University Fuqua School of Business December 11, 2013
“Freedom is the freedom to say that two plus two make four. If that is granted, all else follows.”…George Orwell, “1984″
Another excellent report from Zero Hedge on the US employment situation February 14, 2014.
“The US Participation Rate Is At A 35 Year Low: This Is How It Looks Broken Down State By State”
After years of being roundly ignored by the mainstream media, and certainly be self-important economists, the issue of labor force participation is suddenly up front and center, especially now that the Fed itself finds itself scrambling to explain the humiliation of hitting its 6.5% unemployment “forward guidance” threshold without proceeding to tighten as it said it would initially when it launched QEternity in December 2012.
Incidentally, we predicted precisely this when we said in December 2012 that “using a simple forecast, based on LTM trends across all key employment metrics reveals something very troubling, for the Fed and stocks that is: the 6.5% unemployment rate will be breached in July 2013! Now granted that is simply idiotic, and there is no way that the US economy could possibly recover that fast, but that is precisely what is implied based on the ongoing collapse in the Labor Force Participation, and the concurrent plunge in the Labor Force Participation rate,which has been the biggest marginal driver for the unemployment rate, far more than the number of people who have jobs, or are unemployed (readers can recreate our calculation on their own in 10 minutes with excel).”
Granted, we were off by six months, but we were spot on about the reason why the unemployment threshold number was hit so quickly, instead of as the Fed has originally predicted, some time in 2015/2016.
So now that absolutely everyone is laser-focused more on the participation print, recently at 35 year lows, than the actual unemployment number which even the Fed has implied is meaningless in the current context, one thing to note is that while the overall number is a blended average across the US, it certainly differs on a state by state basis.
In order to get a sense of which states are the winners and losers in the payroll to participation ratio,we go to Gallup, which conveniently has broken down this number on a far more granular basis.
Gallup finds that Washington, D.C., had the highest Payroll to Population (P2P) rate in the country in 2013, at 55.7%. A cluster of states in the Northern Great Plains and Rocky Mountain regions — North Dakota, Nebraska, Minnesota, Wyoming, Iowa, Colorado, and South Dakota — all made the top 10. West Virginia (36.1%) had the lowest P2P rate of all the states.
“Of course, this now defunct demographic explanation does not account for the fact that within the US labor force, the number of people employed aged 55 and over has just hit a record high, as it defeats the demographic explanation. So while one should ignore the rationalization, one should certainly be aware of which states skew the participation distribution on the high and low side.”
“And guess which states were by far the worst offenders when it comes underemployment:
California and Nevada have the highest percentages of their workforces not working at desired capacity. Their rates are about twice those of states at the other end of the spectrum, such as North Dakota (10.1%). Other states hard hit by the recession and declining housing market, including Florida and Arizona, rank among the states with the highest underemployment rates.”