Fluctuating Valuations of Financial Assets, Recovery without Hiring, Ten Million Fewer Full-time Jobs, Youth and Middle-Age Unemployment, United States Industrial Production, United States Producer Prices, World Cyclical Slow Growth and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015
I Recovery without Hiring
IA1 Hiring Collapse
IA2 Labor Underutilization
ICA3 Ten Million Fewer Full-time Jobs
IA4 Theory and Reality of Cyclical Slow Growth Not Secular Stagnation: Youth and
Middle-Age Unemployment
II United States Industrial Production
IIA United States Producer Prices
III World Financial Turbulence
IIIA Financial Risks
IIIE Appendix Euro Zone Survival Risk
IIIF Appendix on Sovereign Bond Valuation
IV Global Inflation
V World Economic Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great Inflation
IIIB Appendix on Safe Haven Currencies
IIIC Appendix on Fiscal Compact
IIID Appendix on European Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit Financing of Growth and the Debt Crisis
IIIGA Monetary Policy with Deficit Financing of Economic Growth
IIIGB Adjustment during the Debt Crisis of the 1980s
I Recovery without Hiring. Professor Edward P. Lazear (2012Jan19) at Stanford University finds that recovery of hiring in the US to peaks attained in 2007 requires an increase of hiring by 30 percent while hiring levels increased by only 4 percent from Jan 2009 to Jan 2012. The high level of unemployment with low level of hiring reduces the statistical probability that the unemployed will find a job. According to Lazear (2012Jan19), the probability of finding a new job in early 2012 is about one third of the probability of finding a job in 2007. Improvements in labor markets have not increased the probability of finding a new job. Lazear (2012Jan19) quotes an essay coauthored with James R. Spletzer in the American Economic Review (Lazear and Spletzer 2012Mar, 2012May) on the concept of churn. A dynamic labor market occurs when a similar amount of workers is hired as those who are separated. This replacement of separated workers is called churn, which explains about two-thirds of total hiring. Typically, wage increases received in a new job are higher by 8 percent. Lazear (2012Jan19) argues that churn has declined 35 percent from the level before the recession in IVQ2007. Because of the collapse of churn, there are no opportunities in escaping falling real wages by moving to another job. As this blog argues, there are meager chances of escaping unemployment because of the collapse of hiring and those employed cannot escape falling real wages by moving to another job (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html). Lazear and Spletzer (2012Mar, 1) argue that reductions of churn reduce the operational effectiveness of labor markets. Churn is part of the allocation of resources or in this case labor to occupations of higher marginal returns. The decline in churn can harm static and dynamic economic efficiency. Losses from decline of churn during recessions can affect an economy over the long-term by preventing optimal growth trajectories because resources are not used in the occupations where they provide highest marginal returns. Lazear and Spletzer (2012Mar 7-8) conclude that: “under a number of assumptions, we estimate that the loss in output during the recession [of 2007 to 2009] and its aftermath resulting from reduced churn equaled $208 billion. On an annual basis, this amounts to about .4% of GDP for a period of 3½ years.”
There are two additional facts discussed below: (1) there are about ten million fewer full-time jobs currently than before the recession of 2008 and 2009; and (2) the extremely high and rigid rate of youth unemployment is denying an early start to young people ages 16 to 24 years while unemployment of ages 45 years or over has swelled. There are four subsections. IA1 Hiring Collapse provides the data and analysis on the weakness of hiring in the United States economy. IA2 Labor Underutilization provides the measures of labor underutilization of the Bureau of Labor Statistics (BLS). Statistics on the decline of full-time employment are in IA3 Ten Million Fewer Full-time Jobs. IA4 Theory and Reality of Cyclical Slow Growth Not Secular Stagnation: Youth and Middle-Age Unemployment provides the data on high unemployment of ages 16 to 24 years and of ages 45 years or over.
IA1 Hiring Collapse. An important characteristic of the current fractured labor market of the US is the closing of the avenue for exiting unemployment and underemployment normally available through dynamic hiring. Another avenue that is closed is the opportunity for advancement in moving to new jobs that pay better salaries and benefits again because of the collapse of hiring in the United States. Those who are unemployed or underemployed cannot find a new job even accepting lower wages and no benefits. The employed cannot escape declining inflation-adjusted earnings because there is no hiring. The objective of this section is to analyze hiring and labor underutilization in the United States.
Blanchard and Katz (1997, 53 consider an appropriate measure of job stress:
“The right measure of the state of the labor market is the exit rate from unemployment, defined as the number of hires divided by the number unemployed, rather than the unemployment rate itself. What matters to the unemployed is not how many of them there are, but how many of them there are in relation to the number of hires by firms.”
The natural rate of unemployment and the similar NAIRU are quite difficult to estimate in practice (Ibid; see Ball and Mankiw 2002).
The Bureau of Labor Statistics (BLS) created the Job Openings and Labor Turnover Survey (JOLTS) with the purpose that (http://www.bls.gov/jlt/jltover.htm#purpose):
“These data serve as demand-side indicators of labor shortages at the national level. Prior to JOLTS, there was no economic indicator of the unmet demand for labor with which to assess the presence or extent of labor shortages in the United States. The availability of unfilled jobs—the jobs opening rate—is an important measure of tightness of job markets, parallel to existing measures of unemployment.”
The BLS collects data from about 16,000 US business establishments in nonagricultural industries through the 50 states and DC. The data are released monthly and constitute an important complement to other data provided by the BLS (see also Lazear and Spletzer 2012Mar, 6-7).
There is socio-economic stress in the combination of adverse events and cyclical performance:
- Mediocre economic growth below potential and long-term trend, resulting in idle productive resources with GDP two trillion dollars below trend (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). US GDP grew at the average rate of 3.3 percent per year from 1929 to 2014 with similar performance in whole cycles of contractions and expansions but only at 1.1 percent per year on average from 2007 to 2014. GDP in IQ2015 is 12.2 percent lower than what it would have been had it grown at trend of 3.0 percent
- Private fixed investment stagnating at increase of 2.7 percent in the entire cycle from IVQ2007 to IQ2015 (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html)
- Twenty six million or 15.4 percent of the effective labor force unemployed or underemployed in involuntary part-time jobs with stagnating or declining real wages (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html)
- Stagnating real disposable income per person or income per person after inflation and taxes (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html)
- Depressed hiring that does not afford an opportunity for reducing unemployment/underemployment and moving to better-paid jobs (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html)
- Productivity growth fell from 2.2 percent per year on average from 1947 to 2014 and average 2.3 percent per year from 1947 to 2007 to 1.4 percent per year on average from 2007 to 2014, deteriorating future growth and prosperity (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html)
- Output of manufacturing in Apr 2015 at 19.7 percent below long-term trend since 1919 and at 14.4 percent below trend since 1986 (Section II and earlier http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Unsustainable government deficit/debt and balance of payments deficit (http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Worldwide waves of inflation (http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html)
- Deteriorating terms of trade and net revenue margins of production across countries in squeeze of economic activity by carry trades induced by zero interest rates (http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Financial repression of interest rates and credit affecting the most people without means and access to sophisticated financial investments with likely adverse effects on income distribution and wealth disparity (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/growth-uncertainties-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/world-financial-turbulence-twenty-seven.html)
- 45 million in poverty and 41 million without health insurance with family income adjusted for inflation regressing to 1995 levels (http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Net worth of households and nonprofits organizations increasing by 11.1 percent after adjusting for inflation in the entire cycle from IVQ2007 to IVQ2014 when it would have grown over 23.8 percent at trend of 3.1 percent per year in real terms from 1945 to 2014 (http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html). Financial assets increased $15.0 trillion while nonfinancial assets increased $898.5 billion with likely concentration of wealth in those with access to sophisticated financial investments. Real estate assets adjusted for inflation fell 9.9 percent from 2007 to IVQ2014
The Bureau of Labor Statistics (BLS) revised on Mar 10, 2015 “Effective with this release, revisions to data from January 2010 forward incorporate annual updates to| the Current Employment Statistics employment estimates and the Job Openings and Labor Turnover Survey seasonal adjustment factors.” (http://www.bls.gov/jlt/). Hiring in the nonfarm sector (HNF) has declined from 63.327 million in 2006 to 58.657 million in 2014 or by 4.670 million while hiring in the private sector (HP) has declined from 59.128 million in 2006 to 55.048 million in 2014 or by 4.080 million, as shown in Table I-1. The ratio of nonfarm hiring to employment (RNF) has fallen from 47.0 in 2005 to 42.2 in 2014 and in the private sector (RHP) from 52.7 in 2005 to 47.0 in 2014. Hiring has not recovered as in previous cyclical expansions because of the low rate of economic growth in the current cyclical expansion. The civilian noninstitutional population or those in condition to work increased from 228.815 million in 2006 to 247.947 million in 2014 or by 19.132 million. Hiring has not recovered precession levels while needs of hiring multiplied because of growth of population by more than 19 million. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 23 quarters from IIIQ2009 to IQ2015. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the first estimate of GDP for IQ2015 (http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp1q15_adv.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,745.9 billion in IIQ2010 by GDP of $14,355.6 billion in IIQ2009 {[$14,745.9/$14,355.6 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988 and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation.
Table I-1, US, Annual Total Nonfarm Hiring (HNF) and Total Private Hiring (HP) in the US in Thousands and Percentage of Total Employment
| HNF | Rate RNF | HP | Rate HP | |
| 2001 | 62,633 | 47.4 | 58,501 | 52.7 |
| 2002 | 58,479 | 44.8 | 54,665 | 50.1 |
| 2003 | 56,949 | 43.7 | 53,584 | 49.3 |
| 2004 | 60,263 | 45.7 | 56,573 | 51.4 |
| 2005 | 62,951 | 47.0 | 59,179 | 52.7 |
| 2006 | 63,327 | 46.4 | 59,128 | 51.7 |
| 2007 | 62,104 | 45.0 | 57,797 | 49.9 |
| 2008 | 54,745 | 39.9 | 51,316 | 44.8 |
| 2009 | 45,931 | 35.0 | 42,703 | 39.3 |
| 2010 | 48,740 | 37.4 | 44,903 | 41.7 |
| 2011 | 50,283 | 38.1 | 47,179 | 43.0 |
| 2012 | 52,367 | 39.0 | 48,916 | 43.6 |
| 2013 | 54,241 | 39.8 | 50,787 | 44.3 |
| 2014 | 58,657 | 42.2 | 55,048 | 47.0 |
Source: Bureau of Labor Statistics
Chart I-1 shows the annual level of total nonfarm hiring (HNF) that collapsed during the global recession after 2007 in contrast with milder decline in the shallow recession of 2001. Nonfarm hiring has not recovered, remaining at a depressed level. The civilian noninstitutional population or those in condition to work increased from 228.815 million in 2006 to 247.947 million in 2014 or by 19.132 million. Hiring has not recovered precession levels while needs of hiring multiplied because of growth of population by more than 19 million.
Chart I-1, US, Level Total Nonfarm Hiring (HNF), Annual, 2001-2014
Source: US Bureau of Labor Statistics
Chart I-2 shows the ratio or rate of nonfarm hiring to employment (RNF) that also fell much more in the recession of 2007 to 2009 than in the shallow recession of 2001. Recovery is weak in the current environment of cyclical slow growth.
Chart I-2, US, Rate Total Nonfarm Hiring (HNF), Annual, 2001-2014
Source: US Bureau of Labor Statistics
Yearly percentage changes of total nonfarm hiring (HNF) are provided in Table I-2. There were much milder declines in 2002 of 6.6 percent and 2.6 percent in 2003 followed by strong rebounds of 5.8 percent in 2004 and 4.5 percent in 2005. In contrast, the contractions of nonfarm hiring in the recession after 2007 were much sharper in percentage points: 1.9 in 2007, 11.8 in 2008 and 16.1 percent in 2009. On a yearly basis, nonfarm hiring grew 6.1 percent in 2010 relative to 2009, 3.2 percent in 2011, 4.1 percent in 2012 and 3.6 percent in 2013. Nonfarm hiring grew 8.1 percent in 2014. The relatively large length of 23 quarters of the current expansion reduces the likelihood of significant recovery of hiring levels in the United States because lower rates of growth and hiring in the final phase of expansions.
Table I-2, US, Annual Total Nonfarm Hiring (HNF), Annual Percentage Change, 2002-2014
| Year | Annual Thousands |
| 2002 | -6.6 |
| 2003 | -2.6 |
| 2004 | 5.8 |
| 2005 | 4.5 |
| 2006 | 0.6 |
| 2007 | -1.9 |
| 2008 | -11.8 |
| 2009 | -16.1 |
| 2010 | 6.1 |
| 2011 | 3.2 |
| 2012 | 4.1 |
| 2013 | 3.6 |
| 2014 | 8.1 |
Source: US Bureau of Labor Statistics
Total private hiring (HP) 12-month percentage changes of annual data are provided in Chart I-4. There has been sharp contraction of total private hiring in the US and only milder recovery from 2010 to 2014.
Chart I-4, US, Total Nonfarm Hiring Level, Annual, ∆%, 2001-2014
Source: Bureau of Labor Statistics
Chart I-5 plots the rate of total private hiring relative to employment (RHP). The rate collapsed during the global recession after 2007 with insufficient recovery.
Chart I-5, US, Total Private Hiring, Annual, 2001-2014
Source: Bureau of Labor Statistics
Chart I-5A plots the rate of total private hiring relative to employment (RHP). The rate collapsed during the global recession after 2007 with insufficient recovery.
Chart I-5A, US, Rate Total Private Hiring Level, Annual, 2001-2014
Source: Bureau of Labor Statistics
Total nonfarm hiring (HNF), total private hiring (HP) and their respective rates are provided for the month of Mar in the years from 2001 to 2015 in Table I-3. Hiring numbers are in thousands. There is recovery in HNF from 3462 thousand (or 3.5 million) in Mar 2009 to 3919 thousand in Mar 2010, 4007 thousand in Mar 2011, 4195 thousand in Mar 2012, 4024 thousand in Mar 2013, 4435 thousand in Mar 2014 and 4753 thousand in Mar 2015 for cumulative gain of 37.3 percent at average rate of 5.4 percent per year. HP rose from 3294 thousand in Mar 2009 to 3665 thousand in Mar 2010, 3830 thousand in Mar 2011, 3985 thousand in Mar 2012, 3821 thousand in Mar 2013, 4206 thousand in Mar 2014 and 4505 thousand in Mar 2015 for cumulative gain of 36.8 percent at the average yearly rate of 5.4 percent. HNF has fallen from 4988 thousand in Mar 2006 to 4753 thousand in Mar 2015 or by 4.7 percent. HP has fallen from 4727 thousand in Mar 2006 to 4505 thousand in Mar 2015 or by 4.7 percent. The civilian noninstitutional population of the US, or those in condition of working, rose from 227.975 million in Mar 2006 to 250.080 million in Mar 2015, by 22.105 million or 9.7 percent. There is often ignored ugly fact that hiring fell by around 4.7 percent while population available for working increased around 9.7 percent. The civilian noninstitutional population of the US, or individuals in condition to work, rose from 228.815 million in 2006 to 247.947 million in 2014 or by 19.132 million and the civilian labor force from 151.428 million in 2006 to 155.922 million in 2014 or by 4.494 million (http://www.bls.gov/data/). The number of nonfarm hires in the US fell from 63.327 million in 2006 to 58.657 million in 2014 or by 4.670 million and the number of private hires fell from 59.128 million in 2006 to 55.048 million in 2014 or by 4.080 million (http://www.bls.gov/jlt/). Private hiring of 59.128 million in 2006 was equivalent to 25.8 percent of the civilian noninstitutional population of 228.815, or those in condition of working, falling to 55.048 million in 2014 or 22.2 percent of the civilian noninstitutional population of 247.947 million in 2014. The percentage of hiring in civilian noninstitutional population of 25.8 percent in 2006 would correspond to 63.970 million of hiring in 2014, which would be 8.922 million higher than actual 55.048 million in 2014. Cyclical slow growth over the entire business cycle from IVQ2007 to the present in comparison with earlier cycles and long-term trend (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html) explains the fact that there are many million fewer hires in the US than before the global recession. The labor market continues to be fractured, failing to provide an opportunity to exit from unemployment/underemployment or to find an opportunity for advancement away from declining inflation-adjusted earnings.
Table I-3, US, Total Nonfarm Hiring (HNF) and Total Private Hiring (HP) in the US in
Thousands and in Percentage of Total Employment Not Seasonally Adjusted
| HNF | Rate RNF | HP | Rate HP | |
| 2001 Mar | 5259 | 4.0 | 5010 | 4.5 |
| 2002 Mar | 4319 | 3.3 | 4098 | 3.8 |
| 2003 Mar | 4164 | 3.2 | 3970 | 3.7 |
| 2004 Mar | 4867 | 3.7 | 4636 | 4.3 |
| 2005 Mar | 4908 | 3.7 | 4691 | 4.3 |
| 2006 Mar | 4988 | 3.7 | 4727 | 4.2 |
| 2007 Mar | 4971 | 3.6 | 4719 | 4.1 |
| 2008 Mar | 4456 | 3.2 | 4235 | 3.7 |
| 2009 Mar | 3462 | 2.6 | 3294 | 3.0 |
| 2010 Mar | 3919 | 3.0 | 3665 | 3.5 |
| 2011 Mar | 4007 | 3.1 | 3830 | 3.6 |
| 2012 Mar | 4195 | 3.2 | 3985 | 3.6 |
| 2013 Mar | 4024 | 3.0 | 3821 | 3.4 |
| 2014 Mar | 4435 | 3.2 | 4206 | 3.7 |
| 2015 Mar | 4753 | 3.4 | 4505 | 3.8 |
Source: Bureau of Labor Statistics
Chart I-6 provides total nonfarm hiring on a monthly basis from 2001 to 2015. Nonfarm hiring rebounded in early 2010 but then fell and stabilized at a lower level than the early peak not-seasonally adjusted (NSA) of 4830 in May 2010 until it surpassed it with 4962 in Jun 2011 but declined to 3114 in Dec 2012. Nonfarm hiring fell to 3025 in Dec 2011 from 3809 in Nov 2011 and to revised 3626 in Feb 2012, increasing to 4195 in Mar 2012, 3114 in Dec 2012 and 4232 in Jan 2013 and declining to 3828 in Feb 2014. Nonfarm hires not seasonally adjusted increased to 4273 in Nov 2013 and 3263 in Dec 2013. Nonfarm hires reached 3750 in Dec 2014 and 4753 in Mar 2015. Chart I-6 provides seasonally adjusted (SA) monthly data. The number of seasonally-adjusted hires in Oct 2011 was 4217 thousand, increasing to revised 4451 thousand in Feb 2012, or 5.5 percent, moving to 4361 in Dec 2012 for cumulative increase of 2.5 percent from 4254 in Dec 2011 and 4545 in Dec 2013 for increase of 4.2 percent relative to 4361 in Dec 2012. The number of hires not seasonally adjusted was 4962 in Jun 2011, falling to 3025 in Dec 2011 but increasing to 4135 in Jan 2012 and declining to 3114 in Dec 2012. The number of nonfarm hiring not seasonally adjusted fell by 39.0 percent from 4962 in Jun 2011 to 3025 in Dec 2011 and fell 37.9 percent from 5013 in Jun 2012 to 3114 in Dec 2012 in a yearly-repeated seasonal pattern. The number of nonfarm hires not seasonally adjusted fell from 5079 in Jun 2013 to 3263 in Dec 2013, or decline of 35.8 percent, showing strong seasonality. The number of nonfarm hires not seasonally adjusted fell from 5459 in Jun 2014 to 3750 in Dec 2014 or 31.3 percent.
Chart I-6, US, Total Nonfarm Hiring (HNF), 2001-2015 Month SA
Source: Bureau of Labor Statistics
Similar behavior occurs in the rate of nonfarm hiring in Chart I-7. Recovery in early 2010 was followed by decline and stabilization at a lower level but with stability in monthly SA estimates of 3.2 in Aug 2011 to 3.2 in Jan 2012, increasing to 3.3 in May 2012 and falling to 3.2 in Jun 2012. The rate stabilized at 3.2 in Jul 2012, increasing to 3.3 in Aug 2012 but falling to 3.2 in Dec 2012 and 3.3 in Dec 2013. The rate not seasonally adjusted fell from 3.7 in Jun 2011 to 2.3 in Dec 2011, climbing to 3.7 in Jun 2012 but falling to 2.3 in Dec 2012. The rate of nonfarm hires not seasonally adjusted fell from 3.7 in Jun 2013 to 2.4 in Dec 2013. The NSA rate of nonfarm hiring fell from 3.9 in Jun 2014 to 2.7 in Dec 2014. Rates of nonfarm hiring NSA were in the range of 2.7 (Dec) to 4.4 (Jun) in 2006. The rate of nonfarm hiring SA stood at 3.6 in Mar 2015 and at 3.4 NSA.
Chart I-7, US, Rate Total Nonfarm Hiring, Month SA 2001-2015
Source: Bureau of Labor Statistics
There is only milder improvement in total private hiring shown in Chart I-8. Hiring private (HP) rose in 2010 with stability and renewed increase in 2011 followed by almost stationary series in 2012. The number of private hiring seasonally adjusted fell from 4056 thousand in Sep 2011 to 3961 in Dec 2011 or by 2.3 percent, decreasing to 4018 in Jan 2012 or decline by 0.9 percent relative to the level in Sep 2011. Private hiring fell to 3947 in Sep 2012 or lower by 2.7 percent relative to Sep 2011, moving to 4073 in Dec 2012 for increase of 1.4 percent relative to 4018 in Jan 2012. The number of private hiring not seasonally adjusted fell from 4601 in Jun 2011 to 2844 in Dec 2011 or by 38.2 percent, reaching 3874 in Jan 2012 or decline of 15.8 percent relative to Jun 2011 and moving to 2935 in Dec 2012 or 36.6 percent lower relative to 4626 in Jun 2012. Hires fell from 4738 in Jun 2013 to 3090 in Dec 2013. The level of private hiring NSA fell from 5110 in Jun 2014 to 3549 in Dec 2014 or 30.5 percent. Companies reduce hiring in the latter part of the year that explains the high seasonality in year-end employment data. For example, NSA private hiring fell from 5567 in Jun 2006 to 3568 in Dec 2006 or by 35.9 percent. Private hiring NSA data are useful in showing the huge declines from the period before the global recession. In Aug 2006, private hiring NSA was 5115, declining to 4182 in Aug 2011 or by 18.2 percent and to 4392 in Aug 2012 or lower by 14.1 percent relative to Aug 2006. Private hiring NSA fell from 5501 in Jul 2006 to 5139 in Jul 2014 or 6.6 percent. Private hiring fell from 3568 in Dec 2006 to 3090 in Dec 2013 or 13.4 percent and to 3549 in Dec 2014 or decline of 0.5 percent. The conclusion is that private hiring in the US is around 3 percent below the hiring before the global recession while the noninstitutional population of the United States has grown from 228.815 million in 2006 to 247.947 million in 2014, by 19.132 million or 8.4 percent. Private hiring of 59.128 million in 2006 was equivalent to 25.8 percent of the civilian noninstitutional population of 228.815, or those in condition of working, falling to 55.048 million in 2014 or 22.2 percent of the civilian noninstitutional population of 247.947 million in 2014. The percentage of hiring in civilian noninstitutional population of 25.8 percent in 2006 would correspond to 63.970 million of hiring in 2014, which would be 8.922 million higher than actual 55.048 million in 2014. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent.
Chart I-8, US, Total Private Hiring Month SA 2001-2015
Source: Bureau of Labor Statistics
Chart I-9 shows similar behavior in the rate of private hiring. The rate in 2011 in monthly SA data did not rise significantly above the peak in 2010. The rate seasonally adjusted fell from 3.7 in Sep 2011 to 3.6 in Dec 2011 and reached 3.6 in Dec 2012 and 3.7 in Dec 2013. The rate not seasonally adjusted (NSA) fell from 3.7 in Sep 2011 to 2.6 in Dec 2011, increasing to 3.8 in Oct 2012 but falling to 2.6 in Dec 2012 and 3.4 in Mar 2013. The NSA rate of private hiring fell from 4.8 in Jul 2006 to 3.4 in Aug 2009 but recovery was insufficient to only 3.9 in Aug 2012, 2.6 in Dec 2012 and 2.7 in Dec 2013. The NSA rate increased to 3.8 in Mar 2015.
![clip_image006[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter393614076\supfiles1F6CDB4\image40.png "clip_image006[1]")
Chart I-9, US, Rate Total Private Hiring Month SA 2001-2015
Source: Bureau of Labor Statistics
The JOLTS report of the Bureau of Labor Statistics also provides total nonfarm job openings (TNF JOB), TNF JOB rate and TNF LD (layoffs and discharges) shown in Table I-4 for the month of Mar from 2001 to 2015. The final column provides annual TNF LD for the years from 2001 to 2014. Nonfarm job openings (TNF JOB) increased from a peak of 4573 in Mar 2007 to 4921 in Mar 2015 or by 7.6 percent while the rate increased from 3.2 to 3.4. This was mediocre performance because the civilian noninstitutional population or those available for work increased from 231.034 million in Mar 2007 to 250.080 million in Mar 2015, by 19.046 million or 8.2 percent. Nonfarm layoffs and discharges (TNF LD) rose from 1329 in Mar 2006 to 1994 in Mar 2009 or by 50.0 percent. The annual data show layoffs and discharges rising from 20.9 million in 2006 to 26.4 million in 2009 or by 26.3 percent. Business pruned payroll jobs to survive the global recession but there has not been hiring because of the low rate of GDP growth. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions.
Table I-4, US, Total Nonfarm Job Openings and Total Nonfarm Layoffs and Discharges, Thousands NSA
| TNF JOB | TNF JOB | TNF LD | TNF LD | |
| Mar 2001 | 4449 | 3.3 | 1725 | 24138 |
| Mar 2002 | 3466 | 2.6 | 1440 | 22706 |
| Mar 2003 | 3008 | 2.3 | 1511 | 23490 |
| Mar 2004 | 3338 | 2.5 | 1533 | 22668 |
| Mar 2005 | 3816 | 2.8 | 1598 | 22243 |
| Mar 2006 | 4448 | 3.2 | 1329 | 20896 |
| Mar 2007 | 4573 | 3.2 | 1465 | 21958 |
| Mar 2008 | 3919 | 2.8 | 1499 | 24028 |
| Mar 2009 | 2445 | 1.8 | 1994 | 26444 |
| Mar 2010 | 2612 | 2.0 | 1482 | 21827 |
| Mar 2011 | 3097 | 2.3 | 1356 | 20801 |
| Mar 2012 | 3802 | 2.8 | 1329 | 20872 |
| Mar 2013 | 3860 | 2.8 | 1386 | 19889 |
| Mar 2014 | 4177 | 3.0 | 1323 | 20418 |
| Mar 2015 | 4921 | 3.4 | 1412 |
Notes: TNF JOB: Total Nonfarm Job Openings; LD: Layoffs and Discharges
Source: Bureau of Labor Statistics
Chart I-10 shows monthly job openings rising from the trough in 2009 to a high in the beginning of 2010. Job openings then stabilized into 2011 but have surpassed the peak of 3097 seasonally adjusted in Apr 2010 with 3640 seasonally adjusted in Dec 2012, which is higher by 17.5 percent relative to Apr 2010 but lower by 2.7 percent relative to 3741 in Nov 2012 and lower by 5.1 percent than 3837 in Mar 2012. Nonfarm job openings increased from 3640 in Dec 2012 to 3977 in Dec 2013 or by 9.3 percent and to 4877 in 2014 or 22.6 percent relative to 2013. The high of job openings not seasonally adjusted was 3428 in Apr 2010 that was surpassed by 3163 in Jul 2011, increasing to 3942 in Oct 2012 but declining to 3189 in Dec 2012 and increasing to 3507 in Dec 2013. The level of job opening NSA increased to 4921 in Mar 2015. The level of job openings not seasonally adjusted fell to 3189 in Dec 2012 or by 21.3 percent relative to 3988 in Apr 2012. There is here again the strong seasonality of year-end labor data. Job openings fell from 4215 in Apr 2013 to 3507 in Dec 2013 and from 4816 in Apr 2014 to 4373 in Dec 2014, showing strong seasonal effects. Nonfarm job openings (TNF JOB) increased from a peak of 4573 in Mar 2007 to 4921 in Mar 2015 or by 7.6 percent while the rate increased from 3.2 to 3.4. This was mediocre performance because the civilian noninstitutional population or those available for work increased from 231.034 million in Mar 2007 to 250.080 million in Mar 2015, by 19.046 million or 8.2 percent. The main problem in recovery of the US labor market has been the low rate of GDP growth. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions. US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 23 quarters from IIIQ2009 to IQ2015. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the first estimate of GDP for IQ2015 (http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp1q15_adv.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,745.9 billion in IIQ2010 by GDP of $14,355.6 billion in IIQ2009 {[$14,745.9/$14,355.6 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988 and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation.
Chart I-10, US Job Openings, Thousands NSA, 2001-2015
Source: US Bureau of Labor Statistics
The rate of job openings in Chart I-11 shows similar behavior. The rate seasonally adjusted increased from 2.2 in Jan 2011 to 2.6 in Dec 2011, 2.6 in Dec 2012, 2.8 in Dec 2013 and 3.4 in Dec 2014. The rate seasonally adjusted stood at 3.4 in Mar 2015. The rate not seasonally adjusted rose from the high of 2.6 in Apr 2010 to 3.0 in Apr 2013, easing to 2.5 in Dec 2013. The rate of job openings NSA fell from 3.3 in Jul 2007 to 1.6 in Nov-Dec 2009, recovering to 3.4 in Mar 2015.
Chart I-11, US, Rate of Job Openings, NSA, 2001-2015
Source: US Bureau of Labor Statistics
Total separations are shown in Chart I-12. Separations are much lower in 2012-15 than before the global recession but hiring has not recovered.
Chart I-12, US, Total Nonfarm Separations, Month Thousands SA, 2001-2015
Source: US Bureau of Labor Statistics
Chart I-13 provides annual total separations. Separations fell sharply during the global recession but hiring has not recovered relative to population growth.
Chart I-13, US, Total Separations, Annual, Thousands, 2001-2014
Source: US Bureau of Labor Statistics
Table I-5 provides total nonfarm total separations from 2001 to 2014. Separations fell from 61.1 million in 2006 to 47.8 million in 2010 or by 13.3 million and 48.2 million in 2011 or by 12.9 million. Total separations increased from 48.2 million in 2011 to 51.8 million in 2013 or by 3.6 million and to 55.5 million in 2014 or by 7.3 million relative to 2011.
Table I-5, US, Total Nonfarm Total Separations, Thousands, 2001-2014
| Year | Annual Thousands |
| 2001 | 64472 |
| 2002 | 59003 |
| 2003 | 56970 |
| 2004 | 58238 |
| 2005 | 60494 |
| 2006 | 61117 |
| 2007 | 60838 |
| 2008 | 58227 |
| 2009 | 51127 |
| 2010 | 47752 |
| 2011 | 48227 |
| 2012 | 50047 |
| 2013 | 51783 |
| 2014 | 55524 |
Source: US Bureau of Labor Statistics
Monthly data of layoffs and discharges reach a peak in early 2009, as shown in Chart I-14. Layoffs and discharges dropped sharply with the recovery of the economy in 2010 and 2011 once employers reduced their job count to what was required for cost reductions and loss of business. Weak rates of growth of GDP (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html) frustrated employment recovery. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent.
Chart I-14, US, Total Nonfarm Layoffs and Discharges, Monthly Thousands SA, 2001-2015
Source: US Bureau of Labor Statistics
Layoffs and discharges in Chart I-15 rose sharply to a peak in 2009. There was pronounced drop into 2010 and 2011 with mild increase into 2012 and renewed decline into 2013. There are is mild increase into 2014.
Chart I-15, US, Total Nonfarm Layoffs and Discharges, Annual, 2001-2014
Source: US Bureau of Labor Statistics
Layoffs and discharges in Chart I-15 rose sharply to a peak in 2009. There was pronounced drop into 2010 and 2011 with mild increase into 2012 and renewed decline into 2013. There is moderate increase in 2014.
Table I-6, US, Total Nonfarm Layoffs and Discharges, Thousands, 2001-2014
| Year | Annual Thousands |
| 2001 | 24138 |
| 2002 | 22706 |
| 2003 | 23490 |
| 2004 | 22668 |
| 2005 | 22243 |
| 2006 | 20896 |
| 2007 | 21958 |
| 2008 | 24028 |
| 2009 | 26444 |
| 2010 | 21827 |
| 2011 | 20801 |
| 2012 | 20872 |
| 2013 | 19889 |
| 2014 | 20418 |
Source: US Bureau of Labor Statistics
IA2 Labor Underutilization. The Bureau of Labor Statistics also provides alternative measures of labor underutilization shown in Table I-7. The most comprehensive measure is U6 that consists of total unemployed plus total employed part time for economic reasons plus all marginally attached workers as percent of the labor force. U6 not seasonally adjusted has risen from 8.2 percent in 2006 to 10.4 percent in Apr 2015.
Table I-7, US, Alternative Measures of Labor Underutilization NSA %
| U1 | U2 | U3 | U4 | U5 | U6 | |
| 2015 | ||||||
| Apr | 2.4 | 2.5 | 5.1 | 5.5 | 6.4 | 10.4 |
| Mar | 2.6 | 2.9 | 5.6 | 6.0 | 6.8 | 11.0 |
| Feb | 2.7 | 3.0 | 5.8 | 6.3 | 7.1 | 11.4 |
| Jan | 2.7 | 3.1 | 6.1 | 6.5 | 7.4 | 12.0 |
| 2014 | ||||||
| Dec | 2.5 | 2.8 | 5.4 | 5.8 | 6.7 | 11.1 |
| Nov | 2.7 | 2.7 | 5.5 | 5.9 | 6.8 | 11.0 |
| Oct | 2.7 | 2.6 | 5.5 | 6.0 | 6.8 | 11.1 |
| Sep | 2.7 | 2.7 | 5.7 | 6.2 | 7.1 | 11.3 |
| Aug | 2.8 | 3.0 | 6.3 | 6.7 | 7.5 | 12.0 |
| Jul | 2.8 | 3.1 | 6.5 | 7.0 | 7.8 | 12.6 |
| Jun | 2.8 | 3.0 | 6.3 | 6.7 | 7.5 | 12.4 |
| May | 3.1 | 3.0 | 6.1 | 6.5 | 7.3 | 11.7 |
| Apr | 3.3 | 3.2 | 5.9 | 6.3 | 7.2 | 11.8 |
| Mar | 3.7 | 3.7 | 6.8 | 7.2 | 8.1 | 12.8 |
| Feb | 3.6 | 3.9 | 7.0 | 7.5 | 8.4 | 13.1 |
| Jan | 3.5 | 4.0 | 7.0 | 7.5 | 8.6 | 13.5 |
| 2013 | ||||||
| Dec | 3.5 | 3.5 | 6.5 | 7.0 | 7.9 | 13.0 |
| Nov | 3.7 | 3.5 | 6.6 | 7.1 | 7.9 | 12.7 |
| Oct | 3.7 | 3.6 | 7.0 | 7.4 | 8.3 | 13.2 |
| Sep | 3.7 | 3.5 | 7.0 | 7.5 | 8.4 | 13.1 |
| Aug | 3.7 | 3.8 | 7.3 | 7.9 | 8.7 | 13.6 |
| Jul | 3.7 | 3.8 | 7.7 | 8.3 | 9.1 | 14.3 |
| Jun | 3.9 | 3.8 | 7.8 | 8.4 | 9.3 | 14.6 |
| May | 4.1 | 3.7 | 7.3 | 7.7 | 8.5 | 13.4 |
| Apr | 4.3 | 3.9 | 7.1 | 7.6 | 8.5 | 13.4 |
| Mar | 4.3 | 4.3 | 7.6 | 8.1 | 9.0 | 13.9 |
| Feb | 4.3 | 4.6 | 8.1 | 8.6 | 9.6 | 14.9 |
| Jan | 4.3 | 4.9 | 8.5 | 9.0 | 9.9 | 15.4 |
| 2012 | ||||||
| Dec | 4.2 | 4.3 | 7.6 | 8.3 | 9.2 | 14.4 |
| Nov | 4.2 | 3.9 | 7.4 | 7.9 | 8.8 | 13.9 |
| Oct | 4.3 | 3.9 | 7.5 | 8.0 | 9.0 | 13.9 |
| Sep | 4.2 | 4.0 | 7.6 | 8.0 | 9.0 | 14.2 |
| Aug | 4.3 | 4.4 | 8.2 | 8.7 | 9.7 | 14.6 |
| Jul | 4.3 | 4.6 | 8.6 | 9.1 | 10.0 | 15.2 |
| Jun | 4.5 | 4.4 | 8.4 | 8.9 | 9.9 | 15.1 |
| May | 4.7 | 4.3 | 7.9 | 8.4 | 9.3 | 14.3 |
| Apr | 4.8 | 4.3 | 7.7 | 8.3 | 9.1 | 14.1 |
| Mar | 4.9 | 4.8 | 8.4 | 8.9 | 9.7 | 14.8 |
| Feb | 4.9 | 5.1 | 8.7 | 9.3 | 10.2 | 15.6 |
| Jan | 4.9 | 5.4 | 8.8 | 9.4 | 10.5 | 16.2 |
| 2011 | ||||||
| Dec | 4.8 | 5.0 | 8.3 | 8.8 | 9.8 | 15.2 |
| Nov | 4.9 | 4.7 | 8.2 | 8.9 | 9.7 | 15.0 |
| Oct | 5.0 | 4.8 | 8.5 | 9.1 | 10.0 | 15.3 |
| Sep | 5.2 | 5.0 | 8.8 | 9.4 | 10.2 | 15.7 |
| Aug | 5.2 | 5.1 | 9.1 | 9.6 | 10.6 | 16.1 |
| Jul | 5.2 | 5.2 | 9.3 | 10.0 | 10.9 | 16.3 |
| Jun | 5.1 | 5.1 | 9.3 | 9.9 | 10.9 | 16.4 |
| May | 5.5 | 5.1 | 8.7 | 9.2 | 10.0 | 15.4 |
| Apr | 5.5 | 5.2 | 8.7 | 9.2 | 10.1 | 15.5 |
| Mar | 5.7 | 5.8 | 9.2 | 9.7 | 10.6 | 16.2 |
| Feb | 5.6 | 6.0 | 9.5 | 10.1 | 11.1 | 16.7 |
| Jan | 5.6 | 6.2 | 9.8 | 10.4 | 11.4 | 17.3 |
| Dec 2010 | 5.4 | 5.9 | 9.1 | 9.9 | 10.7 | 16.6 |
| Annual | ||||||
| 2014 | 3.0 | 3.1 | 6.2 | 6.6 | 7.5 | 12.0 |
| 2013 | 3.9 | 3.9 | 7.4 | 7.9 | 8.8 | 13.8 |
| 2012 | 4.5 | 4.4 | 8.1 | 8.6 | 9.5 | 14.7 |
| 2011 | 5.3 | 5.3 | 8.9 | 9.5 | 10.4 | 15.9 |
| 2010 | 5.7 | 6.0 | 9.6 | 10.3 | 11.1 | 16.7 |
| 2009 | 4.7 | 5.9 | 9.3 | 9.7 | 10.5 | 16.2 |
| 2008 | 2.1 | 3.1 | 5.8 | 6.1 | 6.8 | 10.5 |
| 2007 | 1.5 | 2.3 | 4.6 | 4.9 | 5.5 | 8.3 |
| 2006 | 1.5 | 2.2 | 4.6 | 4.9 | 5.5 | 8.2 |
| 2005 | 1.8 | 2.5 | 5.1 | 5.4 | 6.1 | 8.9 |
| 2004 | 2.1 | 2.8 | 5.5 | 5.8 | 6.5 | 9.6 |
| 2003 | 2.3 | 3.3 | 6.0 | 6.3 | 7.0 | 10.1 |
| 2002 | 2.0 | 3.2 | 5.8 | 6.0 | 6.7 | 9.6 |
| 2001 | 1.2 | 2.4 | 4.7 | 4.9 | 5.6 | 8.1 |
| 2000 | 0.9 | 1.8 | 4.0 | 4.2 | 4.8 | 7.0 |
Note: LF: labor force; U1, persons unemployed 15 weeks % LF; U2, job losers and persons who completed temporary jobs %LF; U3, total unemployed % LF; U4, total unemployed plus discouraged workers, plus all other marginally attached workers; % LF plus discouraged workers; U5, total unemployed, plus discouraged workers, plus all other marginally attached workers % LF plus all marginally attached workers; U6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons % LF plus all marginally attached workers
Source: US Bureau of Labor Statistics
Monthly seasonally adjusted measures of labor underutilization are provided in Table I-8. U6 climbed from 16.1 percent in Aug 2011 to 16.3 percent in Sep 2011 and then fell to 14.5 percent in Mar 2012, reaching 10.8 percent in Apr 2015. Unemployment is an incomplete measure of the stress in US job markets. A different calculation in this blog is provided by using the participation rate in the labor force before the global recession. This calculation shows 25.6 million in job stress of unemployment/underemployment in Apr 2015, not seasonally adjusted, corresponding to 15.4 percent of the labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html).
Table I-8, US, Alternative Measures of Labor Underutilization SA %
| U1 | U2 | U3 | U4 | U5 | U6 | |
| Apr 2015 | 2.3 | 2.6 | 5.4 | 5.9 | 6.7 | 10.8 |
| Mar | 2.4 | 2.7 | 5.5 | 5.9 | 6.7 | 10.9 |
| Feb | 2.6 | 2.7 | 5.5 | 6.0 | 6.8 | 11.0 |
| Jan | 2.7 | 2.7 | 5.7 | 6.1 | 7.0 | 11.3 |
| Dec 2014 | 2.6 | 2.8 | 5.6 | 6.0 | 6.9 | 11.2 |
| Nov | 2.7 | 2.9 | 5.8 | 6.2 | 7.1 | 11.4 |
| Oct | 2.8 | 2.8 | 5.7 | 6.2 | 7.1 | 11.5 |
| Sep | 2.8 | 2.9 | 5.9 | 6.3 | 7.3 | 11.7 |
| Aug | 2.9 | 3.1 | 6.1 | 6.6 | 7.4 | 12.0 |
| July | 2.9 | 3.1 | 6.2 | 6.6 | 7.5 | 12.2 |
| Jun | 2.9 | 3.1 | 6.1 | 6.5 | 7.3 | 12.0 |
| May | 3.1 | 3.2 | 6.3 | 6.7 | 7.5 | 12.1 |
| Apr | 3.2 | 3.3 | 6.2 | 6.7 | 7.5 | 12.3 |
| Mar | 3.4 | 3.5 | 6.6 | 7.1 | 7.9 | 12.6 |
| Feb | 3.5 | 3.5 | 6.7 | 7.1 | 8.0 | 12.6 |
| Jan | 3.4 | 3.4 | 6.6 | 7.1 | 8.1 | 12.7 |
| Dec 2013 | 3.6 | 3.5 | 6.7 | 7.2 | 8.1 | 13.1 |
| Nov | 3.7 | 3.7 | 7.0 | 7.4 | 8.2 | 13.1 |
| Oct | 3.8 | 4.0 | 7.2 | 7.7 | 8.6 | 13.7 |
| Sep | 3.8 | 3.8 | 7.2 | 7.7 | 8.6 | 13.6 |
| Aug | 3.9 | 3.8 | 7.2 | 7.7 | 8.6 | 13.6 |
| Jul | 3.9 | 3.8 | 7.3 | 7.9 | 8.7 | 13.8 |
| Jun | 4.0 | 3.9 | 7.5 | 8.1 | 9.0 | 14.2 |
| May | 4.1 | 3.9 | 7.5 | 8.0 | 8.8 | 13.8 |
| Apr | 4.1 | 4.1 | 7.6 | 8.0 | 8.9 | 14.0 |
| Mar | 4.1 | 4.0 | 7.5 | 8.0 | 8.9 | 13.8 |
| Feb | 4.1 | 4.1 | 7.7 | 8.2 | 9.2 | 14.3 |
| Jan | 4.2 | 4.3 | 8.0 | 8.5 | 9.4 | 14.5 |
| Dec 2012 | 4.3 | 4.2 | 7.9 | 8.5 | 9.4 | 14.4 |
| Nov | 4.2 | 4.2 | 7.7 | 8.3 | 9.2 | 14.4 |
| Oct | 4.4 | 4.2 | 7.8 | 8.3 | 9.2 | 14.4 |
| Sep | 4.4 | 4.2 | 7.8 | 8.3 | 9.3 | 14.7 |
| Aug | 4.4 | 4.5 | 8.0 | 8.5 | 9.5 | 14.6 |
| Jul | 4.5 | 4.6 | 8.2 | 8.7 | 9.6 | 14.8 |
| Jun | 4.6 | 4.6 | 8.2 | 8.7 | 9.6 | 14.8 |
| May | 4.6 | 4.5 | 8.2 | 8.7 | 9.6 | 14.8 |
| Apr | 4.6 | 4.4 | 8.2 | 8.7 | 9.6 | 14.6 |
| Mar | 4.6 | 4.5 | 8.2 | 8.7 | 9.6 | 14.5 |
| Feb | 4.7 | 4.6 | 8.3 | 8.9 | 9.8 | 15.0 |
| Jan | 4.8 | 4.7 | 8.3 | 8.9 | 9.9 | 15.2 |
| Dec 2011 | 4.9 | 4.9 | 8.5 | 9.0 | 10.0 | 15.2 |
| Nov | 5.0 | 5.0 | 8.6 | 9.3 | 10.1 | 15.5 |
| Oct | 5.1 | 5.1 | 8.8 | 9.4 | 10.3 | 15.8 |
| Sep | 5.4 | 5.2 | 9.0 | 9.6 | 10.5 | 16.3 |
| Aug | 5.4 | 5.2 | 9.0 | 9.6 | 10.5 | 16.1 |
| Jul | 5.3 | 5.3 | 9.0 | 9.6 | 10.6 | 15.9 |
| Jun | 5.3 | 5.3 | 9.1 | 9.7 | 10.7 | 16.1 |
| May | 5.3 | 5.4 | 9.0 | 9.5 | 10.3 | 15.8 |
| Apr | 5.2 | 5.4 | 9.1 | 9.7 | 10.5 | 16.1 |
| Mar | 5.3 | 5.4 | 9.0 | 9.5 | 10.4 | 15.9 |
| Feb | 5.3 | 5.5 | 9.0 | 9.6 | 10.6 | 16.0 |
| Jan | 5.5 | 5.5 | 9.2 | 9.7 | 10.8 | 16.2 |
Note: LF: labor force; U1, persons unemployed 15 weeks % LF; U2, job losers and persons who completed temporary jobs %LF; U3, total unemployed % LF; U4, total unemployed plus discouraged workers, plus all other marginally attached workers; % LF plus discouraged workers; U5, total unemployed, plus discouraged workers, plus all other marginally attached workers % LF plus all marginally attached workers; U6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons % LF plus all marginally attached workers
Source: US Bureau of Labor Statistics
Chart I-16 provides U6 on a monthly basis from 2001 to 2015. There was a steep climb from 2007 into 2009 and then this measure of unemployment and underemployment stabilized at that high level but declined into 2012. The low of U6 SA was 8.0 percent in Mar 2007 and the peak was 17.1 percent in Apr 2010. The low NSA was 7.6 percent in Oct 2006 and the peak was 18.0 percent in Jan 2010.
Chart I-16, US, U6, total unemployed, plus all marginally attached workers, plus total employed Part-Time for Economic Reasons, Month, SA, 2001-2015
Source: US Bureau of Labor Statistics
Chart I-17 provides the number employed part-time for economic reasons or who cannot find full-time employment. There are sharp declines at the end of 2009, 2010 and 2011 but an increase in 2012 followed by relative stability in 2013-2015.
Chart I-17, US, Working Part-time for Economic Reasons
Thousands, Month SA 2001-2015
Sources: US Bureau of Labor Statistics
ICA3 Ten Million Fewer Full-time Jobs. There is strong seasonality in US labor markets around the end of the year.
- Seasonally adjusted part-time for economic reasons. The number employed part-time for economic reasons because they could not find full-time employment fell from 9.109 million in Sep 2011 to 7.808 million in Mar 2012, seasonally adjusted, or decline of 1.301 million in six months, as shown in Table I-9. The number employed part-time for economic reasons rebounded to 8.600 million in Sep 2012 for increase of 603,000 in one month from Aug to Sep 2012. The number employed part-time for economic reasons declined to 8.195 million in Oct 2012 or by 405,000 again in one month, further declining to 8.156 million in Nov 2012 for another major one-month decline of 39,000 and 7.926 million in Dec 2012 or fewer 230,000 in just one month. The number employed part-time for economic reasons increased to 8.055 million in Jan 2013 or 129,000 more than in Dec 2012 and to 8.064 million in Feb 2013, declining to 7.947 million in May 2013 but increasing to 8.124 million in Jun 2013. The number employed part-time for economic reasons fell to 7.843 million in Aug 2013 for decline of 244,000 in one month from 8.087 million in Jul 2013. The number employed part-time for economic reasons increased 96,000 from 7.843 million in Aug 2013 to 7.939 million in Sep 2013. The number part-time for economic reasons rose to 7.982 million in Oct 2013, falling by 267,000 to 7.715 million in Nov 2013. The number part-time for economic reasons increased to 7.776 million in Dec 2013, decreasing to 7.274 million in Jan 2014. The number employed part-time for economic reasons fell from 7.274 million in Jan 2014 to 7.204 million in Feb 2014. The number employed part-time for economic reasons increased to 7.449 million in Mar 2014 and 7.460 million in Apr 2014. The number employed part-time for economic reasons fell to 7.268 million in May 2014, increasing to 7.496 million in Jun 2014. The level employed part-time for economic reasons fell to 7.433 million in Jul 2014 and 7.223 million in Aug 2014. The level employed part-time for economic reasons fell to 7.058 million in Sep 2014, 7.012 million in Oct 2014 and 6.851 million in Nov 2014. The level employed part-time for economic reasons fell to 6.790 million in Dec 2014, increasing to 6.810 million in Jan 2015. The level employed part-time for economic reasons fell to 6.635 million in Feb 2015, increasing to 6.705 million in Mar 2015. The level of employed part-time for economic reasons fell to 6.580 million in Apr 2015. There is an increase of 198,000 in part-time for economic reasons from Aug 2012 to Oct 2012 and of 159,000 from Aug 2012 to Nov 2012.
- Seasonally adjusted full-time. The number employed full-time increased from 112.891 million in Oct 2011 to 115.086 million in Mar 2012 or 2.195 million but then fell to 114.245 million in May 2012 or 0.841 million fewer full-time employed than in Mar 2012. The number employed full-time increased from 114.735 million in Aug 2012 to 115.514 million in Oct 2012 or increase of 0.779 million full-time jobs in two months and further to 115.807 million in Jan 2013 or increase of 1.072 million more full-time jobs in five months from Aug 2012 to Jan 2013. The number of full time jobs decreased slightly to 115.751 million in Feb 2013, increasing to 116.244 million in May 2013 and 116.143 million in Jun 2013. Then number of full-time jobs increased to 116.147 million in Jul 2013, 116.453 million in Aug 2013 and 116.869 million in Sep 2013. The number of full-time jobs fell to 116.293 million in Oct 2013 and increased to 116.946 in Nov 2013. The level of full-time jobs fell to 117.240 million in Dec 2013, increasing to 117.650 million in Jan 2014 and 117.859 million in Feb 2014. The level of employment full-time increased to 118.062 million in Mar 2014 and 118.458 million in Apr 2014. The level of full-time employment reached 118.790 million in May 2014, decreasing to 118.252 million in Jun 2014. The level of full-time jobs increased to 118.448 million in Jul 2014 and 118.758 million in Aug 2014. The level of full-time jobs increased to 119.310 million in Sep 2014, 119.681 million in Oct 2014 and 119.507 million in Nov 2014. The level of full-time jobs increased to 119.934 million in Dec 2014 and 120.711 million in Jan 2015. The level of full-time jobs increased to 120.834 million in Feb 2015 and 121.024 million in Mar 2015. The level of full-time jobs decreased to 120.772 million in Apr 2015. Adjustments of benchmark and seasonality-factors at the turn of every year could affect comparability of labor market indicators (http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html).
- Not seasonally adjusted part-time for economic reasons. The number of employed part-time for economic reasons actually increased without seasonal adjustment from 8.271 million in Nov 2011 to 8.428 million in Dec 2011 or by 157,000 and then to 8.918 million in Jan 2012 or by an additional 490,000 for cumulative increase from Nov 2011 to Jan 2012 of 647,000. The level of employed part-time for economic reasons then fell from 8.918 million in Jan 2012 to 7.867 million in Mar 2012 or by 1.051 million and to 7.694 million in Apr 2012 or 1.224 million fewer relative to Jan 2012. In Aug 2012, the number employed part-time for economic reasons reached 7.842 million NSA or 148,000 more than in Apr 2012. The number employed part-time for economic reasons increased from 7.842 million in Aug 2012 to 8.110 million in Sep 2012 or by 3.4 percent. The number part-time for economic reasons fell from 8.110 million in Sep 2012 to 7.870 million in Oct 2012 or by 240.000 in one month. The number employed part-time for economic reasons NSA increased to 8.628 million in Jan 2013 or 758,000 more than in Oct 2012. The number employed part-time for economic reasons fell to 8.298 million in Feb 2013, which is lower by 330,000 relative to 8.628 million in Jan 2013 but higher by 428,000 relative to 7.870 million in Oct 2012. The number employed part time for economic reasons fell to 7.734 million in Mar 2013 or 564,000 fewer than in Feb 2013 and fell to 7.709 million in Apr 2013. The number employed part-time for economic reasons reached 7.618 million in May 2013. The number employed part-time for economic reasons jumped from 7.618 million in May 2013 to 8.440 million in Jun 2013 or 822,000 in one month. The number employed part-time for economic reasons fell to 8.324 million in Jul 2013 and 7.690 million in Aug 2013. The number employed part-time for economic reasons NSA fell to 7.522 million in Sep 2013, increasing to 7.700 million in Oct 2013. The number employed part-time for economic reasons fell to 7.563 million in Nov 2013 and increased to 7.990 million in Dec 2013. The number employed part-time for economic reasons fell to 7.771 million in Jan 2014 and 7.397 million in Feb 2014. The level of part-time for economic reasons increased to 7.455 million in Mar 2014 and fell to 7.243 million in Apr 2014. The number of part-time for economic reasons fell to 6.960 million in May 2014, increasing to 7.805 million in Jun 2014. The level of part-time for economic reasons fell to 7.665 million in Jul 2014 and 7.083 million in Aug 2014. The level of part-time for economic reasons fell to 6.711 million in Sep 2014 and increased to 6.787 million in Oct 2014. The level of part-time for economic reasons reached 6.713 million in Nov 2014 and 6.970 million in Dec 2014, increasing to 7.269 million in Jan 2015. The level of part-time for economic reasons fell to 6.772 million in Feb 2015 and 6.672 million in Mar 2015, falling to 6.356 million in Apr 2015.
- Not seasonally adjusted full-time. The number employed full time without seasonal adjustment fell from 113.138 million in Nov 2011 to 113.050 million in Dec 2011 or by 88,000 and fell further to 111.879 in Jan 2012 for cumulative decrease of 1.259 million. The number employed full-time not seasonally adjusted fell from 113.138 million in Nov 2011 to 112.587 million in Feb 2012 or by 551.000 but increased to 116.214 million in Aug 2012 or 3.076 million more full-time jobs than in Nov 2011. The number employed full-time not seasonally adjusted decreased from 116.214 million in Aug 2012 to 115.678 million in Sep 2012 for loss of 536,000 full-time jobs and rose to 116.045 million in Oct 2012 or by 367,000 full-time jobs in one month relative to Sep 2012. The number employed full-time NSA fell from 116.045 million in Oct 2012 to 115.515 million in Nov 2012 or decline of 530.000 in one month. The number employed full-time fell from 115.515 in Nov 2012 to 115.079 million in Dec 2012 or decline by 436,000 in one month. The number employed full time fell from 115.079 million in Dec 2012 to 113.868 million in Jan 2013 or decline of 1.211 million in one month. The number of full time jobs increased to 114.191 in Feb 2012 or by 323,000 in one month and increased to 114.796 million in Mar 2013 for cumulative increase from Jan by 928,000 full-time jobs but decrease of 283,000 from Dec 2012. The number employed full time reached 117.400 million in Jun 2013 and increased to 117.688 in Jul 2013 or by 288,000. The number employed full-time reached 117.868 million in Aug 2013 for increase of 180,000 in one month relative to Jul 2013. The number employed full-time fell to 117.308 million in Sep 2013 or by 560,000. The number employed full-time fell to 116.798 million in Oct 2013 or decline of 510.000 in one month. The number employed full-time rose to 116.875 million in Nov 2013, falling to 116.661 million in Dec 2013. The number employed full-time fell to 115.744 million in Jan 2014 but increased to 116.323 million in Feb 2014. The level of full-time jobs increased to 116.985 in Mar 2014 and 118.073 million in Apr 2014. The number of full-time jobs increased to 119.179 million in May 2014, increasing to 119.472 million in Jun 2014. The level of full-time jobs increased to 119.900 million in Jul 2014. Comparisons over long periods require use of NSA data. The number with full-time jobs fell from a high of 123.219 million in Jul 2007 to 108.777 million in Jan 2010 or by 14.442 million. The number with full-time jobs in Apr 2015 is 120.402 million, which is lower by 2.817 million relative to the peak of 123.219 million in Jul 2007.
- Loss of full-time jobs. The magnitude of the stress in US labor markets is magnified by the increase in the civilian noninstitutional population of the United States from 231.958 million in Jul 2007 to 250.266 million in Apr 2015 or by 18.308 million (http://www.bls.gov/data/) while in the same period the number of full-time jobs fell 2.817 million. The ratio of full-time jobs of 123.219 million Jul 2007 to civilian noninstitutional population of 231.958 million was 53.1 percent. If that ratio had remained the same, there would be 132.891 million full-time jobs with population of 250.266 million in Apr 2015 (0.531 x 250.266) or 12.489 million fewer full-time jobs relative to actual 120.402 million. There appear to be around 10 million fewer full-time jobs in the US than before the global recession while population increased around 18 million. Mediocre GDP growth is the main culprit of the fractured US labor market. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent. US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 23 quarters from IIIQ2009 to IQ2015. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the first estimate of GDP for IQ2015 (http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp1q15_adv.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,745.9 billion in IIQ2010 by GDP of $14,355.6 billion in IIQ2009 {[$14,745.9/$14,355.6 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988 and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation.
Table I-9, US, Employed Part-time for Economic Reasons, Thousands, and Full-time, Millions
| Part-time Thousands | Full-time Millions | |
| Seasonally Adjusted | ||
| Apr 2015 | 6580 | 120.772 |
| Mar 2015 | 6705 | 121.024 |
| Feb 2015 | 6635 | 120.834 |
| Jan 2015 | 6810 | 120.711 |
| Dec 2014 | 6790 | 119.934 |
| Nov 2014 | 6,851 | 119.507 |
| Oct 2014 | 7,012 | 119.681 |
| Sep 2014 | 7,058 | 119.310 |
| Aug 2014 | 7,223 | 118.758 |
| Jul 2014 | 7,433 | 118.448 |
| Jun 2014 | 7,496 | 118.252 |
| May 2014 | 7,268 | 118.790 |
| Apr 2014 | 7,460 | 118.458 |
| Mar 2014 | 7,449 | 118.062 |
| Feb 2014 | 7,204 | 117.859 |
| Jan 2014 | 7,274 | 117.650 |
| Dec 2013 | 7,776 | 117.240 |
| Nov 2013 | 7,715 | 116.946 |
| Oct 2013 | 7,982 | 116.293 |
| Sep 2013 | 7,939 | 116.869 |
| Aug 2013 | 7,843 | 116.453 |
| Jul 2013 | 8,087 | 116.147 |
| Jun 2013 | 8,124 | 116.143 |
| May 2013 | 7,947 | 116.244 |
| Apr 2013 | 7,933 | 116.018 |
| Mar 2013 | 7,699 | 115.877 |
| Feb 2013 | 8,064 | 115.751 |
| Jan 2013 | 8,055 | 115.807 |
| Dec 2012 | 7,926 | 115.724 |
| Nov 2012 | 8,156 | 115.592 |
| Oct 2012 | 8,195 | 115.514 |
| Sep 2012 | 8,600 | 115.227 |
| Aug 2012 | 7,997 | 114.735 |
| Jul 2012 | 8,087 | 114.571 |
| Jun 2012 | 8,098 | 114.764 |
| May 2012 | 8,163 | 114.245 |
| Apr 2012 | 7,915 | 114.365 |
| Mar 2012 | 7,808 | 115.086 |
| Feb 2012 | 8,193 | 114.186 |
| Jan 2012 | 8,291 | 113.789 |
| Dec 2011 | 8,174 | 113.740 |
| Nov 2011 | 8,450 | 113.177 |
| Oct 2011 | 8,637 | 112.891 |
| Sep 2011 | 9,109 | 112.527 |
| Aug 2011 | 8,781 | 112.715 |
| Jul 2011 | 8,277 | 112.191 |
| Not Seasonally Adjusted | ||
| Apr 2015 | 6,356 | 120.402 |
| Mar 2015 | 6,672 | 119.981 |
| Feb 2015 | 6,772 | 119.313 |
| Jan 2015 | 7,269 | 118.840 |
| Dec 2014 | 6,970 | 119.394 |
| Nov 2014 | 6,713 | 119.441 |
| Oct 2014 | 6,787 | 120.176 |
| Sep 2014 | 6,711 | 119.791 |
| Aug 2014 | 7,083 | 120.110 |
| Jul 2014 | 7,665 | 119.900 |
| Jun 2014 | 7,805 | 119.472 |
| May 2014 | 6,960 | 119.179 |
| Apr 2014 | 7,243 | 118.073 |
| Mar 2014 | 7,455 | 116.985 |
| Feb 2014 | 7,397 | 116.323 |
| Jan 2014 | 7,771 | 115.744 |
| Dec 2013 | 7,990 | 116.661 |
| Nov 2013 | 7,563 | 116.875 |
| Oct 2013 | 7,700 | 116.798 |
| Sep 2013 | 7,522 | 117.308 |
| Aug 2013 | 7,690 | 117.868 |
| Jul 2013 | 8,324 | 117.688 |
| Jun 2013 | 8,440 | 117.400 |
| May 2013 | 7,618 | 116.643 |
| Apr 2013 | 7,709 | 115.674 |
| Mar 2013 | 7,734 | 114.796 |
| Feb 2013 | 8,298 | 114.191 |
| Jan 2013 | 8,628 | 113.868 |
| Dec 2012 | 8,166 | 115.079 |
| Nov 2012 | 7,994 | 115.515 |
| Oct 2012 | 7,870 | 116.045 |
| Sep 2012 | 8,110 | 115.678 |
| Aug 2012 | 7,842 | 116.214 |
| Jul 2012 | 8,316 | 116.131 |
| Jun 2012 | 8,394 | 116.024 |
| May 2012 | 7,837 | 114.634 |
| Apr 2012 | 7,694 | 113.999 |
| Mar 2012 | 7,867 | 113.916 |
| Feb 2012 | 8,455 | 112.587 |
| Jan 2012 | 8,918 | 111.879 |
| Dec 2011 | 8,428 | 113.050 |
| Nov 2011 | 8,271 | 113.138 |
| Oct 2011 | 8,258 | 113.456 |
| Sep 2011 | 8,541 | 112.980 |
| Aug 2011 | 8,604 | 114.286 |
| Jul 2011 | 8,514 | 113.759 |
| Jun 2011 | 8,738 | 113.255 |
| May 2011 | 8,270 | 112.618 |
| Apr 2011 | 8,425 | 111.844 |
| Mar 2011 | 8,737 | 111.186 |
| Feb 2011 | 8,749 | 110.731 |
| Jan 2011 | 9,187 | 110.373 |
| Dec 2010 | 9,205 | 111.207 |
| Nov 2010 | 8,670 | 111.348 |
| Oct 2010 | 8,408 | 112.342 |
| Sep 2010 | 8,628 | 112.385 |
| Aug 2010 | 8,628 | 113.508 |
| Jul 2010 | 8,737 | 113.974 |
| Jun 2010 | 8,867 | 113.856 |
| May 2010 | 8,513 | 112.809 |
| Apr 2010 | 8,921 | 111.391 |
| Mar 2010 | 9,343 | 109.877 |
| Feb 2010 | 9,282 | 109.100 |
| Jan 2010 | 9,290 | 108.777 (low) |
| Dec 2009 | 9,354 (high) | 109.875 |
| Nov 2009 | 8,894 | 111.274 |
| Oct 2009 | 8,474 | 111.599 |
| Sep 2009 | 8,255 | 111.991 |
| Aug 2009 | 8,835 | 113.863 |
| Jul 2009 | 9,103 | 114.184 |
| Jun 2009 | 9,301 | 114.014 |
| May 2009 | 8,785 | 113.083 |
| Apr 2009 | 8,648 | 112.746 |
| Mar 2009 | 9,305 | 112.215 |
| Feb 2009 | 9,170 | 112.947 |
| Jan 2009 | 8,829 | 113.815 |
| Dec 2008 | 8,250 | 116.422 |
| Nov 2008 | 7,135 | 118.432 |
| Oct 2008 | 6,267 | 120.020 |
| Sep 2008 | 5,701 | 120.213 |
| Aug 2008 | 5,736 | 121.556 |
| Jul 2008 | 6,054 | 122.378 |
| Jun 2008 | 5,697 | 121.845 |
| May 2008 | 5,096 | 120.809 |
| Apr 2008 | 5,071 | 120.027 |
| Mar 2008 | 5,038 | 119.875 |
| Feb 2008 | 5,114 | 119.452 |
| Jan 2008 | 5,340 | 119.332 |
| Dec 2007 | 4,750 | 121.042 |
| Nov 2007 | 4,374 | 121.846 |
| Oct 2007 | 4,028 | 122.006 |
| Sep 2007 | 4,137 | 121.728 |
| Aug 2007 | 4,494 | 122.870 |
| Jul 2007 | 4,516 | 123.219 (high) |
| Jun 2007 | 4,469 | 122.150 |
| May 2007 | 4,315 | 120.846 |
| Apr 2007 | 4,205 | 119.609 |
| Mar 2007 | 4,384 | 119.640 |
| Feb 2007 | 4,417 | 119.041 |
| Jan 2007 | 4,726 | 119.094 |
| Dec 2006 | 4,281 | 120.371 |
| Nov 2006 | 4,054 | 120.507 |
| Oct 2006 | 4,010 | 121.199 |
| Sep 2006 | 3,735 (low) | 120.780 |
| Aug 2006 | 4,104 | 121.979 |
| Jul 2006 | 4,450 | 121.951 |
| Jun 2006 | 4,456 | 121.070 |
| May 2006 | 3,968 | 118.925 |
| Apr 2006 | 3,787 | 118.559 |
| Mar 2006 | 4,097 | 117.693 |
| Feb 2006 | 4,403 | 116.823 |
| Jan 2006 | 4,597 | 116.395 |
Source: US Bureau of Labor Statistics
People lose their marketable job skills after prolonged unemployment and face increasing difficulty in finding another job. Chart I-18 shows the sharp rise in unemployed over 27 weeks and stabilization at an extremely high level.
Chart I-18, US, Number Unemployed for 27 Weeks or Over, Thousands SA Month 2001-2015
Sources: US Bureau of Labor Statistics
Another segment of U6 consists of people marginally attached to the labor force who continue to seek employment but less frequently on the frustration there may not be a job for them. Chart I-19 shows the sharp rise in people marginally attached to the labor force after 2007 and subsequent stabilization.
Chart I-19, US, Marginally Attached to the Labor Force, NSA Month, Thousands, 2001-2015
Sources: US Bureau of Labor Statistics
The number with full-time jobs in Apr 2015 is 120.402 million, which is lower by 2.817 million relative to the peak of 123.219 million in Jul 2007. The magnitude of the stress in US labor markets is magnified by the increase in the civilian noninstitutional population of the United States from 231.958 million in Jul 2007 to 250.266 million in Apr 2015 or by 18.308 million (http://www.bls.gov/data/) while in the same period the number of full-time jobs fell 2.817 million. The ratio of full-time jobs of 123.219 million Jul 2007 to civilian noninstitutional population of 231.958 million was 53.1 percent. If that ratio had remained the same, there would be 132.891 million full-time jobs with population of 250.266 million in Apr 2015 (0.531 x 250.266) or 12.489 million fewer full-time jobs relative to actual 120.402 million. There appear to be around 10 million fewer full-time jobs in the US than before the global recession while population increased around 18 million. Mediocre GDP growth is the main culprit of the fractured US labor market.
Chart I-20 provides unadjusted full-time jobs in the US from 2001 to 2015 with sharp drop and incomplete recovery. There is current interest in past theories of “secular stagnation.” Alvin H. Hansen (1939, 4, 7; see Hansen 1938, 1941; for an early critique see Simons 1942) argues:
“Not until the problem of full employment of our productive resources from the long-run, secular standpoint was upon us, were we compelled to give serious consideration to those factors and forces in our economy which tend to make business recoveries weak and anaemic (sic) and which tend to prolong and deepen the course of depressions. This is the essence of secular stagnation-sick recoveries which die in their infancy and depressions which feed on them-selves and leave a hard and seemingly immovable core of unemployment. Now the rate of population growth must necessarily play an important role in determining the character of the output; in other words, the com-position of the flow of final goods. Thus a rapidly growing population will demand a much larger per capita volume of new residential building construction than will a stationary population. A stationary population with its larger proportion of old people may perhaps demand more personal services; and the composition of consumer demand will have an important influence on the quantity of capital required. The demand for housing calls for large capital outlays, while the demand for personal services can be met without making large investment expenditures. It is therefore not unlikely that a shift from a rapidly growing population to a stationary or declining one may so alter the composition of the final flow of consumption goods that the ratio of capital to output as a whole will tend to decline.”
The argument that anemic population growth causes “secular stagnation” in the US (Hansen 1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early dissent see Simons 1942). This is merely another case of theory without reality with dubious policy proposals.
Inferior performance of the US economy and labor markets, during cyclical slow growth not secular stagnation, is the critical current issue of analysis and policy design.
Chart I-20, US, Full-time Employed, Thousands, NSA, 2001-2015
Sources: US Bureau of Labor Statistics
Chart I-20A provides the noninstitutional civilian population of the United States from 2001 to 2015. There is clear trend of increase of the population while the number of full-time jobs collapsed after 2008 without sufficient recovery as shown in the preceding Chart I-20.
Chart I-20A, US, Noninstitutional Civilian Population, Thousands, 2001-2015
Sources: US Bureau of Labor Statistics
Chart I-20B provides number of full-time jobs in the US from 1968 to 2015. There were multiple recessions followed by expansions without contraction of full-time jobs and without recovery as during the period after 2008. The problem is specific of the current cycle and not secular.
Chart I-20B, US, Full-time Employed, Thousands, NSA, 1968-2015
Sources: US Bureau of Labor Statistics
Chart I-20C provides the noninstitutional civilian population of the United States from 1968 to 2015. Population expanded at a relatively constant rate of increase with the assurance of creation of full-time jobs that has been broken since 2008.
Chart I-20C, US, Noninstitutional Civilian Population, Thousands, 1968-2015
Sources: US Bureau of Labor Statistics
IA4 Theory and Reality of Secular Stagnation: Youth and Middle-Age Unemployment. Three tables support the argument that the proper comparison of the business cycle is between the recessions of the 1980s and the global recession after IVQ2007 and not as argued erroneously with the Great Depression of the 1930s. Table I-5 provides percentage change of real GDP in the United States in the 1930s, 1980s and 2000s. The recession in 1981-1982 is quite similar on its own to the 2007-2009 recession. In contrast, during the Great Depression in the four years of 1930 to 1933, GDP in constant dollars fell 26.4 percent cumulatively and fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization and the State, Vol. II (2009b), 205-7 and revisions in http://bea.gov/iTable/index_nipa.cfm). Data are available for the 1930s only on a yearly basis. US GDP fell 4.7 percent in the two recessions (1) from IQ1980 to IIIQ1980 and (2) from III1981 to IVQ1981 to IVQ1982 and 4.2 percent cumulatively in the recession from IVQ2007 to IIQ2009. It is instructive to compare the first years of the expansions in the 1980s and the current expansion. GDP grew at 4.6 percent in 1983, 7.3 percent in 1984, 4.2 percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987 and 4.2 percent in 1988. In contrast, GDP grew 2.5 percent in 2010, 1.6 percent in 2011, 2.3 percent in 2012, 2.2 percent in 2013 and 2.4 percent in 2014. Actual annual equivalent GDP growth in the four quarters of 2012, and nine quarters from IQ2013 to IQ2015 is 2.2 percent and 3.0 percent in the four quarters ending in IQ2015. GDP grew at 4.2 percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987 and 4.2 percent in 1988. The forecasts of the central tendency of participants of the Federal Open Market Committee (FOMC) are in the range of 2.3 to 2.7 percent in 2015 (http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20150318.pdf) with less reliable forecast of 2.3 to 2.7 percent in 2016 (http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20150318.pdf). Growth of GDP in the expansion from IIIQ2009 to IQ2015 has been at average 2.2 percent in annual equivalent.
Table I-5, US, Percentage Change of GDP in the 1930s, 1980s and 2000s, ∆%
| Year | GDP ∆% | Year | GDP ∆% | Year | GDP ∆% |
| 1930 | -8.5 | 1980 | -0.2 | 2000 | 4.1 |
| 1931 | -6.4 | 1981 | 2.6 | 2001 | 1.0 |
| 1932 | -12.9 | 1982 | -1.9 | 2002 | 1.8 |
| 1933 | -1.3 | 1983 | 4.6 | 2003 | 2.8 |
| 1934 | 10.8 | 1984 | 7.3 | 2004 | 3.8 |
| 1935 | 8.9 | 1985 | 4.2 | 2005 | 3.3 |
| 1936 | 12.9 | 1986 | 3.5 | 2006 | 2.7 |
| 1937 | 5.1 | 1987 | 3.5 | 2007 | 1.8 |
| 1938 | -3.3 | 1988 | 4.2 | 2008 | -0.3 |
| 1930 | 8.0 | 1989 | 3.7 | 2009 | -2.8 |
| 1940 | 8.8 | 1990 | 1.9 | 2010 | 2.5 |
| 1941 | 17.7 | 1991 | -0.1 | 2011 | 1.6 |
| 1942 | 18.9 | 1992 | 3.6 | 2012 | 2.3 |
| 1943 | 17.0 | 1993 | 2.7 | 2013 | 2.2 |
| 1944 | 8.0 | 1994 | 4.0 | 2014 | 2.4 |
Source: US Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
Characteristics of the four cyclical contractions are provided in Table I-6 with the first column showing the number of quarters of contraction; the second column the cumulative percentage contraction; and the final column the average quarterly rate of contraction. There were two contractions from IQ1980 to IIIQ1980 and from IIIQ1981 to IVQ1982 separated by three quarters of expansion. The drop of output combining the declines in these two contractions is 4.7 percent, which is almost equal to the decline of 4.2 percent in the contraction from IVQ2007 to IIQ2009. In contrast, during the Great Depression in the four years of 1930 to 1933, GDP in constant dollars fell 26.4 percent cumulatively and fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization and the State, Vol. II (2009b), 205-7 and revisions in http://bea.gov/iTable/index_nipa.cfm). The comparison of the global recession after 2007 with the Great Depression is entirely misleading.
Table I-6, US, Number of Quarters, GDP Cumulative Percentage Contraction and Average Percentage Annual Equivalent Rate in Cyclical Contractions
| Number of Quarters | Cumulative Percentage Contraction | Average Percentage Rate | |
| IIQ1953 to IIQ1954 | 3 | -2.4 | -0.8 |
| IIIQ1957 to IIQ1958 | 3 | -3.0 | -1.0 |
| IVQ1973 to IQ1975 | 5 | -3.1 | -0.6 |
| IQ1980 to IIIQ1980 | 2 | -2.2 | -1.1 |
| IIIQ1981 to IVQ1982 | 4 | -2.5 | -0.64 |
| IVQ2007 to IIQ2009 | 6 | -4.2 | -0.72 |
Sources: Source: Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
Table I-7 shows the mediocre average annual equivalent growth rate of 2.3 percent of the US economy in the twenty-two quarters of the current cyclical expansion from IIIQ2009 to IVQ2014. In sharp contrast, the average growth rate of GDP was:
- 5.7 percent in the first thirteen quarters of expansion from IQ1983 to IQ1986
- 5.4 percent in the first fifteen quarters of expansion from IQ1983 to IIIQ1986
- 5.2 percent in the first sixteen quarters of expansion from IQ1983 to IVQ1986
- 5.0 percent in the first seventeen quarters of expansion from IQ1983 to IQ1987
- 5.0 percent in the first eighteen quarters of expansion from IQ1983 to IIQ1987
- 4.9 percent in the first nineteen quarters of expansion from IQ1983 to IIIQ1987
- 5.0 percent in the first twenty quarters of expansion from IQ1983 to IVQ1987
- 4.9 percent in the first twenty-first quarters of expansion from IQ1983 to IQ1988
- 4.9 percent in the first twenty-two quarters of expansion from IQ1983 to IIQ1988
- 4.8 percent in the first twenty-three quarters of expansion from IQ1983 to IIIQ1988
The line “average first four quarters in four expansions” provides the average growth rate of 7.7 percent with 7.8 percent from IIIQ1954 to IIQ1955, 9.2 percent from IIIQ1958 to IIQ1959, 6.1 percent from IIIQ1975 to IIQ1976 and 7.8 percent from IQ1983 to IVQ1983. The United States missed this opportunity of high growth in the initial phase of recovery. BEA data show the US economy in standstill with annual growth of 2.5 percent in 2010 decelerating to 1.6 percent annual growth in 2011, 2.3 percent in 2012, 2.2 percent in 2013 and 2.4 percent in 2014 (http://www.bea.gov/iTable/index_nipa.cfm) The expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.2 percent from IQ1983 to IVQ1986, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IQ1988, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988 and at 7.8 percent from IQ1983 to IVQ1983. GDP grew 2.7 percent in the first four quarters of the expansion from IIIQ2009 to IIQ2010. GDP growth in the four quarters of 2012, the four quarters of 2013, the four quarters of 2014 and IQ2015 accumulated to 7.3 percent. This growth is equivalent to 2.2 percent per year, obtained by dividing GDP in IQ2015 of $16,304.8 billion by GDP in IVQ2011 of $15,190.3 billion and compounding by 4/13: {[($16,304.8/$15,190.3)4/13 -1]100 = 2.2 percent.
Table I-7, US, Number of Quarters, Cumulative Growth and Average Annual Equivalent Growth Rate in Cyclical Expansions
| Number | Cumulative Growth ∆% | Average Annual Equivalent Growth Rate | |
| IIIQ 1954 to IQ1957 | 11 | 12.8 | 4.5 |
| First Four Quarters IIIQ1954 to IIQ1955 | 4 | 7.8 | |
| IIQ1958 to IIQ1959 | 5 | 10.0 | 7.9 |
| First Four Quarters IIIQ1958 to IIQ1959 | 4 | 9.2 | |
| IIQ1975 to IVQ1976 | 8 | 8.3 | 4.1 |
| First Four Quarters IIIQ1975 to IIQ1976 | 4 | 6.1 | |
| IQ1983-IQ1986 IQ1983-IIIQ1986 IQ1983-IVQ1986 IQ1983-IQ1987 IQ1983-IIQ1987 IQ1983 to IIIQ1987 IQ1983 to IVQ1987 IQ1983 to IQ1988 IQ1983 to IIQ1988 IQ1983 to IIIQ1988 | 13 15 16 17 18 19 20 21 22 23 | 19.9 21.6 22.3 23.1 24.5 25.6 27.7 28.4 30.1 30.9 | 5.7 5.4 5.2 5.0 5.0 4.9 5.0 4.9 4.9 4.8 |
| First Four Quarters IQ1983 to IVQ1983 | 4 | 7.8 | |
| Average First Four Quarters in Four Expansions* | 7.7 | ||
| IIIQ2009 to IQ2015 | 23 | 13.6 | 2.2 |
| First Four Quarters IIIQ2009 to IIQ2010 | 2.7 |
*First Four Quarters: 7.8% IIIQ1954-IIQ1955; 9.2% IIIQ1958-IIQ1959; 6.1% IIIQ1975-IQ1976; 7.8% IQ1983-IVQ1983
Source: Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
Table EMP provides the comparison between the labor market in the current whole cycle from 2007 to 2014 and the whole cycle from 1979 to 1988. In the entire cycle from 2007 to 2014, the number employed increased 0.258 million, full-time employed fell 2.373 million, part-time for economic reasons increased 2.812 million and population increased 16.080 million. The number employed increased 0.2 percent, full-time employed fell 2.0 percent, part-time for economic reasons increased 63.9 percent and population increased 6.9 percent. There is sharp contrast with the contractions of the 1980s and with most economic history of the United States. In the whole cycle from 1979 to 1988, the number employed increased 16.144 million, full-time employed increased 12.560 million, part-time for economic reasons 1.629 million and population 19.750 million. In the entire cycle from 1979 to 1988, the number employed increased 16.3 percent, full-time employed 15.2 percent, part-time for economic reasons 45.5 percent and population 12.0 percent. The difference between the 1980s and the current cycle after 2007 is in the high rate of growth after the contraction that maintained trend growth around 3.0 percent for the entire cycle and per capital growth at 2.0 percent. The evident fact is that current weakness in labor markets originates in cyclical slow growth and not in imaginary secular stagnation.
Table EMP, US, Annual Level of Employed, Full-Time Employed, Employed Part-Time for Economic Reasons and Noninstitutional Civilian Population, Millions
| Employed | Full-Time Employed | Part Time Economic Reasons | Noninstitutional Civilian Population | |
| 2000s | ||||
| 2000 | 136.891 | 113.846 | 3.227 | 212.577 |
| 2001 | 136.933 | 113.573 | 3.715 | 215.092 |
| 2002 | 136.485 | 112.700 | 4.213 | 217.570 |
| 2003 | 137.736 | 113.324 | 4.701 | 221.168 |
| 2004 | 139.252 | 114.518 | 4.567 | 223.357 |
| 2005 | 141.730 | 117.016 | 4.350 | 226.082 |
| 2006 | 144.427 | 119.688 | 4.162 | 228.815 |
| 2007 | 146.047 | 121.091 | 4.401 | 231.867 |
| 2008 | 145.362 | 120.030 | 5.875 | 233.788 |
| 2009 | 139.877 | 112.634 | 8.913 | 235.801 |
| 2010 | 139.064 | 111.714 | 8.874 | 237.830 |
| 2011 | 139.869 | 112.556 | 8.560 | 239.618 |
| 2012 | 142.469 | 114.809 | 8.122 | 243.284 |
| 2013 | 143.929 | 116.314 | 7.935 | 245.679 |
| 2014 | 146.305 | 118.718 | 7.213 | 247.947 |
| ∆2007-2014 | 0.258 | -2,373 | 2.812 | 16.080 |
| ∆% 2007-2013 | 0.2 | -2.0 | 63.9 | 6.9 |
| 1980s | ||||
| 1979 | 98.824 | 82.654 | 3.577 | 164.863 |
| 1980 | 99.303 | 82.562 | 4.321 | 167.745 |
| 1981 | 100.397 | 83.243 | 4.768 | 170.130 |
| 1982 | 99.526 | 81.421 | 6.170 | 172.271 |
| 1983 | 100.834 | 82.322 | 6.266 | 174.215 |
| 1984 | 105.005 | 86.544 | 5.744 | 176.383 |
| 1985 | 107.150 | 88.534 | 5.590 | 178.206 |
| 1986 | 109.597 | 90.529 | 5.588 | 180.587 |
| 1987 | 112.440 | 92.957 | 5.401 | 182.753 |
| 1988 | 114.968 | 95.214 | 5.206 | 184.613 |
| 1989 | 117.342 | 97.369 | 4.894 | 186.393 |
| ∆1979-1988 | 16.144 | 12.560 | 1.629 | 19.750 |
| ∆% 1979-88 | 16.3 | 15.2 | 45.5 | 12.0 |
Source: Bureau of Labor Statistics
There is current interest in past theories of “secular stagnation.” Alvin H. Hansen (1939, 4, 7; see Hansen 1938, 1941; for an early critique see Simons 1942) argues:
“Not until the problem of full employment of our productive resources from the long-run, secular standpoint was upon us, were we compelled to give serious consideration to those factors and forces in our economy which tend to make business recoveries weak and anaemic (sic) and which tend to prolong and deepen the course of depressions. This is the essence of secular stagnation-sick recoveries which die in their infancy and depressions which feed on them-selves and leave a hard and seemingly immovable core of unemployment. Now the rate of population growth must necessarily play an important role in determining the character of the output; in other words, the com-position of the flow of final goods. Thus a rapidly growing population will demand a much larger per capita volume of new residential building construction than will a stationary population. A stationary population with its larger proportion of old people may perhaps demand more personal services; and the composition of consumer demand will have an important influence on the quantity of capital required. The demand for housing calls for large capital outlays, while the demand for personal services can be met without making large investment expenditures. It is therefore not unlikely that a shift from a rapidly growing population to a stationary or declining one may so alter the composition of the final flow of consumption goods that the ratio of capital to output as a whole will tend to decline.”
The argument that anemic population growth causes “secular stagnation” in the US (Hansen 1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early dissent see Simons 1942). Youth workers would obtain employment at a premium in an economy with declining population. In fact, there is currently population growth in the ages of 16 to 24 years but not enough job creation and discouragement of job searches for all ages. This is merely another case of theory without reality with dubious policy proposals. Inferior performance of the US economy and labor markets is the critical current issue of analysis and policy design.
In revealing research, Edward P. Lazear and James R. Spletzer (2012JHJul22) use the wealth of data in the valuable database and resources of the Bureau of Labor Statistics (http://www.bls.gov/data/) in providing clear thought on the nature of the current labor market of the United States. The critical issue of analysis and policy currently is whether unemployment is structural or cyclical. Structural unemployment could occur because of (1) industrial and demographic shifts and (2) mismatches of skills and job vacancies in industries and locations. Consider the aggregate unemployment rate, Y, expressed in terms of share si of a demographic group in an industry i and unemployment rate yi of that demographic group (Lazear and Spletzer 2012JHJul22, 5-6):
Y = ∑isiyi (1)
This equation can be decomposed for analysis as (Lazear and Spletzer 2012JHJul22, 6):
∆Y = ∑i∆siy*i + ∑i∆yis*i (2)
The first term in (2) captures changes in the demographic and industrial composition of the economy ∆si multiplied by the average rate of unemployment y*i , or structural factors. The second term in (2) captures changes in the unemployment rate specific to a group, or ∆yi, multiplied by the average share of the group s*i, or cyclical factors. There are also mismatches in skills and locations relative to available job vacancies. A simple observation by Lazear and Spletzer (2012JHJul22) casts intuitive doubt on structural factors: the rate of unemployment jumped from 4.4 percent in the spring of 2007 to 10 percent in October 2009. By nature, structural factors should be permanent or occur over relative long periods. The revealing result of the exhaustive research of Lazear and Spletzer (2012JHJul22) is:
“The analysis in this paper and in others that we review do not provide any compelling evidence that there have been changes in the structure of the labor market that are capable of explaining the pattern of persistently high unemployment rates. The evidence points to primarily cyclic factors.”
The theory of secular stagnation cannot explain sudden collapse of the US economy and labor markets. There are accentuated cyclic factors for both the entire population and the young population of ages 16 to 24 years. Table Summary Total provides the total noninstitutional population (ICP) of the US, full-time employment level (FTE), employment level (EMP), civilian labor force (CLF), civilian labor force participation rate (CLFP), employment/population ratio (EPOP) and unemployment level (UNE). Secular stagnation would spread over long periods instead of immediately. All indicators of the labor market weakened sharply during the contraction and did not recover. Population continued to grow but all other variables collapsed and did not recover. The theory of secular stagnation departs from an aggregate production function in which output grows with the use of labor, capital and technology (see Pelaez and Pelaez, Globalization and the State, Vol. I (2008a), 11-16). Hansen (1938, 1939) finds secular stagnation in lower growth of an aging population. In the current US economy, Table Summary shows that population is dynamic while the labor market is fractured. There is key explanation in the behavior of the civilian labor force participation rate (CLFP) and the employment population ratio (EPOP) that collapsed during the global recession with inadequate recovery. Abandoning job searches are difficult to capture in labor statistics but likely explain the decline in the participation of the population in the labor force. Allowing for abandoning job searches, the total number of people unemployed or underemployed is 25.6 million or 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html).
Table Summary Total, US, Total Noninstitutional Civilian Population, Full-time Employment, Employment, Civilian Labor Force, Civilian Labor Force Participation Rate, Employment Population Ratio, Unemployment, NSA, Millions and Percent
| ICP | FTE | EMP | CLF | CLFP | EPOP | UNE | |
| 2006 | 228.8 | 119.7 | 144.4 | 151.4 | 66.2 | 63.1 | 7.0 |
| 2009 | 235.8 | 112.6 | 139.9 | 154.1 | 65.4 | 59.3 | 14.3 |
| 2012 | 243.3 | 114.8 | 142.5 | 155.0 | 63.7 | 58.6 | 12.5 |
| 2013 | 245.7 | 116.3 | 143.9 | 155.4 | 63.2 | 58.6 | 11.5 |
| 2014 | 247.9 | 118.7 | 146.3 | 155.9 | 62.9 | 59.0 | 9.6 |
| 12/07 | 233.2 | 121.0 | 146.3 | 153.7 | 65.9 | 62.8 | 7.4 |
| 9/09 | 236.3 | 112.0 | 139.1 | 153.6 | 65.0 | 58.9 | 14.5 |
| 4/15 | 250.3 | 120.4 | 148.6 | 156.6 | 62.6 | 59.4 | 8.0 |
ICP: Total Noninstitutional Civilian Population; FT: Full-time Employment Level, EMP: Total Employment Level; CLF: Civilian Labor Force; CLFP: Civilian Labor Force Participation Rate; EPOP: Employment Population Ratio; UNE: Unemployment
Source: Bureau of Labor Statistics
The same situation is present in the labor market for young people in ages 16 to 24 years with data in Table Summary Youth. The youth noninstitutional civilian population (ICP) continued to increase during and after the global recession. There is the same disastrous labor market with decline for young people in employment (EMP), civilian labor force (CLF), civilian labor force participation rate (CLFP) and employment population ratio (EPOP). There are only increases for unemployment of young people (UNE) and youth unemployment rate (UNER). If aging were a factor of secular stagnation, growth of population of young people would attract a premium in remuneration in labor markets. The sad fact is that young people are also facing tough labor markets. The application of the theory of secular stagnation to the US economy and labor markets is void of reality in the form of key facts, which are best explained by accentuated cyclic factors analyzed by Lazear and Spletzer (2012JHJul22).
Table Summary Youth, US, Youth, Ages 16 to 24 Years, Noninstitutional Civilian Population, Full-time Employment, Employment, Civilian Labor Force, Civilian Labor Force Participation Rate, Employment Population Ratio, Unemployment, NSA, Millions and Percent
| ICP | EMP | CLF | CLFP | EPOP | UNE | UNER | |
| 2006 | 36.9 | 20.0 | 22.4 | 60.6 | 54.2 | 2.4 | 10.5 |
| 2009 | 37.6 | 17.6 | 21.4 | 56.9 | 46.9 | 3.8 | 17.6 |
| 2012 | 38.8 | 17.8 | 21.3 | 54.9 | 46.0 | 3.5 | 16.2 |
| 2013 | 38.8 | 18.1 | 21.4 | 55.0 | 46.5 | 3.3 | 15.5 |
| 2014 | 38.7 | 18.4 | 21.3 | 55.0 | 47.6 | 2.9 | 13.4 |
| 12/07 | 37.5 | 19.4 | 21.7 | 57.8 | 51.6 | 2.3 | 10.7 |
| 9/09 | 37.6 | 17.0 | 20.7 | 55.2 | 45.1 | 3.8 | 18.2 |
| 4/15 | 38.7 | 18.2 | 20.4 | 52.8 | 47.2 | 2.2 | 10.7 |
ICP: Youth Noninstitutional Civilian Population; EMP: Youth Employment Level; CLF: Youth Civilian Labor Force; CLFP: Youth Civilian Labor Force Participation Rate; EPOP: Youth Employment Population Ratio; UNE: Unemployment; UNER: Youth Unemployment Rate
Source: Bureau of Labor Statistics
The United States is experiencing high youth unemployment as in European economies. Table I-10 provides the employment level for ages 16 to 24 years of age estimated by the Bureau of Labor Statistics. On an annual basis, youth employment fell from 20.041 million in 2006 to 17.362 million in 2011 or 2.679 million fewer youth jobs and to 17.834 million in 2012 or 2.207 million fewer jobs. Youth employment fell from 20.041 million in 2006 to 18.057 million in 2013 or 1.984 million fewer jobs. Youth employment fell from 20.041 million in 2006 to 18.442 million in 2014 or 1.599 million. The level of youth jobs fell from 20.129 million in Dec 2006 to 18.347 million in Dec 2014 for 1.782 million fewer youth jobs. The level of youth jobs fell from 19.406 million in Apr 2006 to 18.0241 million in Apr 2015 or 1.165 million fewer jobs. During the seasonal peak months of youth employment in the summer from Jun to Aug, youth employment has fallen by more than two million jobs relative to 21.167 million in Aug 2006 to 18.972 million in Aug 2014 for 2.195 million fewer jobs. Youth employment fell from 21.914 million in Jul 2006 to 20.085 million in Jul 2014 for 1.829 million fewer youth jobs. The number of youth jobs fell from 21.268 million in Jun 2006 million to 19.421 million in Jun 2014 or 1.847 million fewer youth jobs. The number of jobs ages 16 to 24 years fell from 21.167 million in Aug 2006 to 18.636 million in Aug 2013 or by 2.531 million. The number of youth jobs fell from 19.604 million in Sep 2006 to 18.043 million in Sep 2013 or 1.561 million fewer youth jobs. The number of youth jobs fell from 20.129 million in Dec 2006 to 18.106 million in Dec 2013 or 2.023 million fewer jobs. The civilian noninstitutional population ages 16 to 24 years increased from 37.443 million in Jul 2007 to 38.861 million in Jul 2013 or by 1.418 million while the number of jobs for ages 16 to 24 years fell by 2.230 million from 21.914 million in Jul 2006 to 19.684 million in Jul 2013. The civilian noninstitutional population for ages 16 to 24 years increased from 37.455 million in Aug 2007 to 38.841 million in Aug 2013 or by 1.386 million while the number of youth jobs fell by 1.777 million. The civilian noninstitutional population increased from 37.467 million in Sep 2007 to 38.822 million in Sep 2013 or by 1.355 million while the number of youth jobs fell by 1.455 million. The civilian noninstitutional population increased from 37.480 million in Oct 2007 to 38.804 million in Oct 2013 or by 1.324 million while the number of youth jobs decreased 1.877 million from Oct 2006 to Oct 2013. The civilian noninstitutional population increased from 37.076 million in Nov 2006 to 38.798 million in Nov 2013 or by 1.722 million while the number of youth jobs fell 1.799 million. The civilian noninstitutional population increased from 37.518 million in Dec 2007 to 38.790 million in Dec 2013 or by 1.272 million while the number of youth jobs fell 2.023 million from Dec 2006 to Dec 2013. The youth civilian noninstitutional population increased 1.488 million from 37.282 million in in Jan 2007 to 38.770 million in Jan 2014 while the number of youth jobs fell 2.035 million. The youth civilian noninstitutional population increased 1.464 million from 37.302 in Feb 2007 to 38.766 million in Feb 2014 while the number of youth jobs decreased 2.058 million. The civilian noninstitutional population increased 1.437 million from 37.324 million in Mar 2007 to 38.761 million in Mar 2014 while jobs for ages 16 to 24 years decreased 1.599 million from 19.538 million in Mar 2007 to 17.939 million in Mar 2014. The civilian noninstitutional population ages 16 to 24 years increased 1.410 million from 37.349 million in Apr 2007 to 38.759 million in Apr 2014 while the number of youth jobs fell 1.347 million. The civilian noninstitutional population increased 1.370 million from 37.379 million in May 2007 to 38.749 million in May 2014 while the number of youth jobs decreased 1.128 million. The civilian noninstitutional population increased 1.330 million from 37.410 million in Jun 2007 to 38.740 million in Jun 2014 while the number of youth jobs fell 1.847 million from 21.268 million in Jun 2006 to 19.421 million in Jun 2014. The youth civilian noninstitutional population increased by 1.292 million from 37.443 million in Jul 2007 to 38.735 million in Jul 2014 while the number of youth jobs fell 1.632 million. The youth civilian noninstitutional population increased from 37.445 million in Aug 2007 to 38.706 million in Aug 2014 or 1.251 million while the number of youth jobs fell 1.441 million. The youth civilian noninstitutional population increased 1.652 million from 37.027 million in Sep 2006 to 38.679 million in Sep 2014 while the number of youth jobs fell 1.500 million. The youth civilian noninstitutional population increased from 37.047 million in Oct 2006 to 38.650 million in Oct 2014 or 1.603 million while the number of youth jobs fell 1.072 million. The youth civilian noninstitutional population increased from 37.076 million in Nov 2006 to 38.628 million in Nov 2014 or 1.552 million while the number of youth jobs fell 1.327 million. The civilian noninstitutional population increased from 37.100 million in Dec 2006 to 38.606 million in Dec 2014 or 1.506 million while the number of youth jobs fell 1.782 million. The civilian noninstitutional population increased 1.971 million from 36.761 million in Jan 2006 to 38.732 million in Jan 2015 while the number of youth jobs fell 1.091 million. The civilian noninstitutional population increased 1.914 million from 36.791 million in Feb 2006 to 38.705 million in Feb 2015 while the number of youth jobs fell 0.960 million. The civilian noninstitutional population increased 1.858 million from 36.821 million in Mar 2006 to 38.679 million in Mar 2015 while the number of youth jobs fell 1.215 million. The youth civilian noninstitutional population increased 1.800 million from 36.854 million in Apr 2006 to 38.654 million in Apr 2015 while the number of youth jobs fell 1.165 million. The hardship does not originate in low growth of population but in underperformance of the economy in the expansion from the business cycle. There are two hardships behind these data. First, young people cannot find employment after finishing high school and college, reducing prospects for achievement in older age. Second, students with more modest means cannot find employment to keep them in college.
Table I-10, US, Employment Level 16-24 Years, Thousands, NSA
| Year | Jan | Feb | Mar | Apr | Oct | Nov | Dec |
| 2001 | 19678 | 19745 | 19800 | 19778 | 19694 | 19675 | 19547 |
| 2002 | 18653 | 19074 | 19091 | 19108 | 19542 | 19397 | 19394 |
| 2003 | 18811 | 18880 | 18709 | 18873 | 19139 | 19163 | 19136 |
| 2004 | 18852 | 18841 | 18752 | 19184 | 19609 | 19615 | 19619 |
| 2005 | 18858 | 18670 | 18989 | 19071 | 19794 | 19750 | 19733 |
| 2006 | 19003 | 19182 | 19291 | 19406 | 19853 | 19903 | 20129 |
| 2007 | 19407 | 19415 | 19538 | 19368 | 19564 | 19660 | 19361 |
| 2008 | 18724 | 18546 | 18745 | 19161 | 18757 | 18454 | 18378 |
| 2009 | 17467 | 17606 | 17564 | 17739 | 16671 | 16689 | 16615 |
| 2010 | 16166 | 16412 | 16587 | 16764 | 16867 | 16946 | 16727 |
| 2011 | 16512 | 16638 | 16898 | 16970 | 17532 | 17402 | 17234 |
| 2012 | 16944 | 17150 | 17301 | 17387 | 17842 | 17877 | 17604 |
| 2013 | 17183 | 17257 | 17271 | 17593 | 17976 | 18104 | 18106 |
| 2014 | 17372 | 17357 | 17939 | 18021 | 18781 | 18576 | 18347 |
| 2015 | 17912 | 18222 | 18076 | 18241 |
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-21 provides US employment level ages 16 to 24 years from 2002 to 2015. Employment level is sharply lower in Jan 2015 relative to the peak in 2007. The following Chart I-21A relates youth employment and youth civilian noninstitutional population.
Chart I-21, US, Employment Level 16-24 Years, Thousands SA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-21A provides the US civilian noninstitutional population ages 16 to 24 years not seasonally adjusted from 2001 to 2015. The civilian noninstitutional population ages 16 to 24 years increased from 37.443 million in Jul 2007 to 38.861 million in Jul 2013 or by 1.418 million while the number of jobs for ages 16 to 24 years fell by 2.230 million from 21.914 million in Jul 2006 to 19.684 million in Jul 2013. The civilian noninstitutional population for ages 16 to 24 years increased from 37.455 million in Aug 2007 to 38.841 million in Aug 2013 or by 1.386 million while the number of youth jobs fell by 1.777 million. The civilian noninstitutional population increased from 37.467 million in Sep 2007 to 38.822 million in Sep 2013 or by 1.355 million while the number of youth jobs fell by 1.455 million. The civilian noninstitutional population increased from 37.480 million in Oct 2007 to 38.804 million in Oct 2013 or by 1.324 million while the number of youth jobs decreased 1.877 million from Oct 2006 to Oct 2013. The civilian noninstitutional population increased from 37.076 million in Nov 2006 to 38.798 million in Nov 2013 or by 1.722 million while the number of youth jobs fell 1.799 million. The civilian noninstitutional population increased from 37.518 million in Dec 2007 to 38.790 million in Dec 2013 or by 1.272 million while the number of youth jobs fell 2.023 million from Dec 2006 to Dec 2013. The youth civilian noninstitutional population increased 1.488 million from 37.282 million in in Jan 2007 to 38.770 million in Jan 2014 while the number of youth jobs fell 2.035 million. The youth civilian noninstitutional population increased 1.464 million from 37.302 in Feb 2007 to 38.766 million in Feb 2014 while the number of youth jobs decreased 2.058 million. The civilian noninstitutional population increased 1.437 million from 37.324 million in Mar 2007 to 38.761 million in Mar 2014 while jobs for ages 16 to 24 years decreased 1.599 million from 19.538 million in Mar 2007 to 17.939 million in Mar 2014. The civilian noninstitutional population ages 16 to 24 years increased 1.410 million from 37.349 million in Apr 2007 to 38.759 million in Apr 2014 while the number of youth jobs fell 1.347 million. The civilian noninstitutional population increased 1.370 million from 37.379 million in May 2007 to 38.749 million in May 2014 while the number of youth jobs decreased 1.128 million. The civilian noninstitutional population increased 1.330 million from 37.410 million in Jun 2007 to 38.740 million in Jun 2014 while the number of youth jobs fell 1.847 million from 21.268 million in Jun 2006 to 19.421 million in Jun 2014. The youth civilian noninstitutional population increased by 1.292 million from 37.443 million in Jul 2007 to 38.735 million in Jul 2014 while the number of youth jobs fell 1.632 million. The youth civilian noninstitutional population increased from 37.445 million in Aug 2007 to 38.706 million in Aug 2014 or 1.251 million while the number of youth jobs fell 1.441 million. The youth civilian noninstitutional population increased 1.652 million from 37.027 million in Sep 2006 to 38.679 million in Sep 2014 while the number of youth jobs fell 1.500 million. The youth civilian noninstitutional population increased from 37.047 million in Oct 2006 to 38.650 million in Oct 2014 or 1.603 million while the number of youth jobs fell 1.072 million. The youth civilian noninstitutional population increased from 37.076 million in Nov 2006 to 38.628 million in Nov 2014 or 1.552 million while the number of youth jobs fell 1.327 million. The civilian noninstitutional population increased from 37.100 million in Dec 2006 to 38.606 million in Dec 2014 or 1.506 million while the number of youth jobs fell 1.782 million. The civilian noninstitutional population increased 1.971 million from 36.761 million in Jan 2006 to 38.732 million in Jan 2015 while the number of youth jobs fell 1.091 million. The civilian noninstitutional population increased 1.914 million from 36.791 million in Feb 2006 to 38.705 million in Feb 2015 while the number of youth jobs fell 0.960 million. The civilian noninstitutional population increased 1.858 million from 36.821 million in Mar 2006 to 38.679 million in Mar 2015 while the number of youth jobs fell 1.215 million. The youth civilian noninstitutional population increased 1.800 million from 36.854 million in Apr 2006 to 38.654 million in Apr 2015 while the number of youth jobs fell 1.165 million. The hardship does not originate in low growth of population but in underperformance of the economy in the expansion from the business cycle. There are two hardships behind these data. First, young people cannot find employment after finishing high school and college, reducing prospects for achievement in older age. Second, students with more modest means cannot find employment to keep them in college.
Chart I-21A, US, Civilian Noninstitutional Population Ages 16 to 24 Years, Thousands NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-21B provides the civilian labor force of the US ages 16 to 24 years NSA from 2001 to 2015. The US civilian labor force ages 16 to 24 years fell from 24.339 million in Jul 2007 to 23.506 million in Jul 2013, by 0.833 million or decline of 3.4 percent, while the civilian noninstitutional population NSA increased from 37.443 million in Jul 2007 to 38.861 million in Jul 2013, by 1.418 million or 3.8 percent. The US civilian labor force ages 16 to 24 fell from 22.801 million in Aug 2007 to 22.089 million in Aug 2013, by 0.712 million or 3.1 percent, while the noninstitutional population for ages 16 to 24 years increased from 37.455 million in Aug 2007 to 38.841 million in Aug 2013, by 1.386 million or 3.7 percent. The US civilian labor force ages 16 to 24 years fell from 21.917 million in Sep 2007 to 21.183 million in Sep 2013, by 0.734 million or 3.3 percent while the civilian noninstitutional youth population increased from 37.467 million in Sep 2007 to 38.822 million in Sep 2013 by 1.355 million or 3.6 percent. The US civilian labor force fell from 21.821 million in Oct 2007 to 21.003 million in Oct 2013, by 0.818 million or 3.7 percent while the noninstitutional youth population increased from 37.480 million in Oct 2007 to 38.804 million in Oct 2013, by 1.324 million or 3.5 percent. The US youth civilian labor force fell from 21.909 million in Nov 2007 to 20.825 million in Nov 2013, by 1.084 million or 4.9 percent while the civilian noninstitutional youth population increased from 37.076 million in Nov 2006 to 38.798 million in Nov 2013 or by 1.722 million. The US youth civilian labor force fell from 21.684 million in Dec 2007 to 20.642 million in Dec 2013, by 1.042 million or 4.8 percent, while the civilian noninstitutional population increased from 37.518 million in Dec 2007 to 38.790 million in Dec 2013, by 1.272 million or 3.4 percent. The youth civilian labor force of the US fell from 21.770 million in Jan 2007 to 20.423 million in Jan 2014, by 1.347 million or 6.2 percent while the youth civilian noninstitutional population increased 37.282 million in Jan 2007 to 38.770 million in Jan 2014, by 1.488 million or 4.0 percent. The youth civilian labor force of the US fell 1.255 million from 21.645 million in Feb 2007 to 20.390 million in Feb 2014 while the youth civilian noninstitutional population increased 1.464 million from 37.302 million in Feb 2007 to 38.766 million in Feb 2014. The youth civilian labor force of the US fell 0.693 million from 21.634 million in Mar 2007 to 20.941 million in Mar 2014 or 3.2 person while the youth noninstitutional civilian population 1.437 million from 37.324 million in Mar 2007 to 38.761 million in Mar 2014 or 3.9 percent. The US youth civilian labor force fell 981 thousand from 21.442 million in Apr 2007 to 20.461 million in Apr 2014 while the youth civilian noninstitutional population increased from 37.349 million in Apr 2007 to 38.759 million in Apr 2014 by 1.410 thousand or 3.8 percent. The youth civilian labor force decreased from 21.659 million in May 2007 to 21.160 million in May 2014 by 499 thousand or 2.3 percent while the youth civilian noninstitutional population increased 1.370 million from 37.739 million in May 2007 to 38.749 million in May 2007 or by 2.7 percent. The youth civilian labor force decreased from 24.128 million in Jun 2006 to 22.851 million in Jun 2014 by 1.277 million or 5.3 percent while the civilian noninstitutional population increased from 36.943 million in Jun 2006 to 38.740 million in Jun 2014 by 1.797 million or 4.9 percent. The youth civilian labor force fell from 24.664 million in Jul 2006 to 23.437 million in Jul 2014 while the civilian noninstitutional population increased from 36.989 million in Jul 2006 to 38.735 million in Jul 2014. The youth civilian labor force fell 1.818 million from 23.634 million in Aug 2006 to 21.816 million in Aug 2014 while the civilian noninstitutional population increased from 37.008 million in Aug 2006 to 38.706 million in Aug 2914 or 1.698 million. The youth civilian labor force fell 0.942 million from 21.901 million in Sep 2006 to 20.959 million in Sep 2014 while the noninstitutional population increased 1.652 million from 37.027 million in Sep 2006 to 38.679 million in Sep 2014. The youth civilian labor force decreased 0.702 million from 22.105 million in Oct 2006 to 21.403 million in Oct 2014 while the youth civilian noninstitutional population increased from 37.047 million in Oct 2006 to 38.650 million in Oct 2014 or 1.603 million. The youth civilian labor force decreased 1.111 million from 22.145 million in Nov 2006 to 21.034 million in Nov 2014 while the youth civilian noninstitutional population increased from 37.076 million in Nov 2006 to 38.628 million in Nov 2014 or 1.552 million. The youth civilian labor force decreased 1.472 million from 22.136 million in Dec 2006 to 20.664 million in Dec 2014 while the youth civilian noninstitutional population increased from 37.100 million in Dec 2006 to 38.606 million in Dec 2014 or 1.506 million. The youth civilian labor force decreased 0.831 million from 21.368 million in Jan 2006 to 20.555 million in Jan 2015 while the youth noninstitutional population increased from 36.761 million in Jan 2006 to 38.732 million in Jan 2015 or 1.971 million. The youth civilian labor force decreased 0.864 million from 21.615 million in Feb 2006 to 20.751 million in Feb 2015 while the youth noninstitutional population increased 1.914 million from 36.791 million in Feb 2006 to 38.705 million in Feb 2015. The youth civilian labor force decreased 0.907 million from 21.507 million in Mar 2006 to 20.600 million in Mar 2015 while the civilian noninstitutional population increased 1.858 million from 36.821 million in Mar 2006 to 38.679 million in Mar 2015. The youth civilian labor force decreased 1.082 million from 21.498 million in Apr 2006 to 20.416 million in Apr 2015 while the youth civilian noninstitutional population increased 1.800 million from 36.854 million in Apr 2006 to 38.654 million in Apr 2015. Youth in the US abandoned their participation in the labor force because of the frustration that there are no jobs available for them.
Chart I-21B, US, Civilian Labor Force Ages 16 to 24 Years, Thousands NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-21C provides the ratio of labor force to noninstitutional population or labor force participation of ages 16 to 24 years not seasonally adjusted. The US labor force participation rates for ages 16 to 24 years fell from 66.7 in Jul 2006 to 60.5 in Jul 2013 because of the frustration of young people who believe there may not be jobs available for them. The US labor force participation rate of young people fell from 63.9 in Aug 2006 to 56.9 in Aug 2013. The US labor force participation rate of young people fell from 59.1 percent in Sep 2006 to 54.6 percent in Sep 2013. The US labor force participation rate of young people fell from 59.7 percent in Oct 2006 to 54.1 in Oct 2013. The US labor force participation rate of young people fell from 59.7 percent in Nov 2006 to 53.7 percent in Nov 2013. The US labor force participation rate fell from 57.8 in Dec 2007 to 53.2 in Dec 2013. The youth labor force participation rate fell from 58.4 in Jan 2007 to 52.7 in Jan 2014. The US youth labor force participation rate fell from 58.0 percent in Feb 2007 to 52.6 percent in Feb 2013. The labor force participation rate of ages 16 to 24 years fell from 58.0 in Mar 2007 to 54.0 in Mar 2014. The labor force participation rate of ages 16 to 24 years fell from 57.4 in Apr 2007 to 52.8 in Apr 2014. The labor force participation rate of ages 16 to 24 years fell from 57.9 in May 2007 to 54.6 in May 2014. The labor force participation rate of ages 16 to 24 years fell from 65.3 in Jun 2006 to 59.0 in Jun 2014. The labor force participation rate ages 16 to 24 years fell from 66.7 in Jul 2006 to 60.5 in Jul 2014. The labor force participation rate ages 16 to 24 years fell from 63.9 in Aug 2006 to 56.4 in Aug 2014. The labor force participation rate ages 16 to 24 years fell from 59.1 in Sep 2006 to 54.2 in Sep 2014. The labor force participation rate ages 16 to 24 years fell from 59.7 in Oct 2006 to 55.4 in Oct 2014. The labor force participation rate ages 16 to 24 years fell from 59.7 in Nov 2006 to 54.5 in Nov 2014. The labor force participation rate ages 16 to 24 fell from 59.7 in Dec 2006 to 53.5 in Dec 2014. The labor force participation rate ages 16 to 24 fell from 58.1 in Jan 2006 to 53.1 in Jan 2015. The labor force participation rate ages 16 to 24 fell from 58.8 in Feb 2006 to 53.6 in Feb 2015. The labor force participation rate ages 16 to 64 fell from 58.4 in Mar 2006 to 53.3 in Mar 2015. The labor force participation rate ages 16 to 64 fell from 58.7 in Apr 2005 to 52.8 in Apr 2006. Many young people abandoned searches for employment, dropping from the labor force.
Chart I-21C, US, Labor Force Participation Rate Ages 16 to 24 Years, NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
An important measure of the job market is the number of people with jobs relative to population available for work (civilian noninstitutional population) or employment/population ratio. Chart I-21D provides the employment population ratio for ages 16 to 24 years. The US employment/population ratio NSA for ages 16 to 24 years collapsed from 59.2 in Jul 2006 to 50.7 in Jul 2013. The employment population ratio for ages 16 to 24 years dropped from 57.2 in Aug 2006 to 48.0 in Aug 2013. The employment population ratio for ages to 16 to 24 years declined from 52.9 in Sep 2006 to 46.5 in Sep 2013. The employment population ratio for ages 16 to 24 years fell from 53.6 in Oct 2006 to 46.3 in Oct 2013. The employment population ratio for ages 16 to 24 years fell from 53.7 in Nov 2007 to 46.7 in Nov 2013. The US employment population ratio for ages 16 to 24 years fell from 51.6 in Dec 2007 to 46.7 in Dec 2013. The US employment population ratio fell from 52.1 in Jan 2007 to 44.8 in Jan 2014. The US employment population ratio for ages 16 to 24 fell from 52.0 in Feb 2007 to 44.8 in Feb 2014. The US employment population ratio for ages 16 to 24 years fell from 52.3 in Mar 2007 to 46.3 in Mar 2014. The US employment population ratio for ages 16 to 24 years fell from 51.9 in Apr 2007 to 46.5 in Apr 2014. The US employment population ratio for ages 16 to 24 years fell from 52.1 in May 2007 to 47.3 in May 2014. The US employment population ratio for ages 16 to 24 years fell from 57.6 in Jun 2006 to 50.1 in Jun 2014. The US employment population ratio for ages 16 to 24 years fell from 59.2 in Jul 2006 to 50.1 in Jul 2014. The employment population ratio for ages 16 to 24 years fell from 57.2 in Aug 2006 to 49.0 in Aug 2014. The employment population ratio for ages 16 to 24 fell from 52.9 in Sep 2006 to 46.8 in Sep 2014. The employment population ratio for ages 16 to 24 fell from 53.6 in Oct 2006 to 48.6 in Oct 2014. The employment population ratio for ages 16 to 24 fell from 53.7 in Nov 2006 to 48.1 in Nov 2014. The employment population ration for ages 16 to 24 fell from 54.3 in Dec 2006 to 47.5 in Dec 2014. The employment population ration for ages 16 to 24 years fell from 51.7 in Jan 2006 to 46.2 in Jan 2015. The employment population ratio for ages 16 to 24 fell from 52.1 in Feb 2006 to 47.1 in Feb 2015. The employment population ratio for ages 16 to 24 years fell from 52.4 in Mar 2006 to 46.7 in Mar 2015. The employment population ratio for ages 16 to 24 years fell from 52.7 in Apr 2006 to 47.2 in Apr 2015. Chart I-21D shows vertical drop during the global recession without recovery.
Chart I-21D, US, Employment Population Ratio Ages 16 to 24 Years, Thousands NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Table I-11 provides US unemployment level ages 16 to 24 years. The number unemployed ages 16 to 24 years increased from 2342 thousand in 2007 to 3634 thousand in 2011 or by 1.292 million and 3451 thousand in 2012 or by 1.109 million. The unemployment level ages 16 to 24 years increased from 2342 in 2007 to 3324 thousand in 2013 or by 0.982 million. The unemployment level ages 16 to 24 years increased from 2342 thousand in 2007 to 2853 thousand in 2014 or by 0.511 million. The unemployment level ages 16 to 24 years stabilized from 2.074 million in Apr 2007 to 2.175 million in Apr 2015 or increase by 0.101 million. This situation may persist for many years.
Table I-11, US, Unemployment Level 16-24 Years, NSA, Thousands
| Year | Jan | Feb | Mar | Apr | Oct | Nov | Dec | Annual |
| 2001 | 2250 | 2258 | 2253 | 2095 | 2424 | 2470 | 2412 | 2371 |
| 2002 | 2754 | 2731 | 2822 | 2515 | 2468 | 2570 | 2374 | 2683 |
| 2003 | 2748 | 2740 | 2601 | 2572 | 2522 | 2522 | 2248 | 2746 |
| 2004 | 2767 | 2631 | 2588 | 2387 | 2572 | 2448 | 2294 | 2638 |
| 2005 | 2661 | 2787 | 2520 | 2398 | 2285 | 2369 | 2055 | 2521 |
| 2006 | 2366 | 2433 | 2216 | 2092 | 2252 | 2242 | 2007 | 2353 |
| 2007 | 2363 | 2230 | 2096 | 2074 | 2258 | 2250 | 2323 | 2342 |
| 2008 | 2633 | 2480 | 2347 | 2196 | 2842 | 2833 | 2928 | 2830 |
| 2009 | 3278 | 3457 | 3371 | 3321 | 3789 | 3699 | 3532 | 3760 |
| 2010 | 3983 | 3888 | 3748 | 3803 | 3731 | 3561 | 3352 | 3857 |
| 2011 | 3851 | 3696 | 3520 | 3365 | 3386 | 3287 | 3161 | 3634 |
| 2012 | 3416 | 3507 | 3294 | 3175 | 3285 | 3102 | 3153 | 3451 |
| 2013 | 3674 | 3449 | 3261 | 3129 | 3028 | 2721 | 2536 | 3324 |
| 2014 | 3051 | 3033 | 3002 | 2440 | 2622 | 2458 | 2317 | 2853 |
| 2015 | 2644 | 2529 | 2524 | 2175 |
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-22 provides the unemployment level for ages 16 to 24 from 2001 to 2015. The level rose sharply from 2007 to 2010 with tepid improvement into 2012 and deterioration into 2013-2014 with recent marginal improvement alternating with deterioration.
Chart I-22, US, Unemployment Level 16-24 Years, Thousands SA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Table I-12 provides the rate of unemployment of young peoples in ages 16 to 24 years. The annual rate jumped from 10.5 percent in 2007 to 18.4 percent in 2010, 17.3 percent in 2011 and 16.2 percent in 2012. The rate of youth unemployment fell marginally to 15.5 percent in 2013, declining to 13.4 percent in Dec 2014. During the seasonal peak in Jul, the rate of youth unemployed was 18.1 percent in Jul 2011, 17.1 percent in Jul 2012 and 16.3 percent in Jul 2013 compared with 10.8 percent in Jul 2007. The rate of youth unemployment rose from 11.2 percent in Jul 2006 to 16.3 percent in Jul 2013 and likely higher if adding those who ceased searching for a job in frustration none may be available. The rate of youth unemployment rose from 10.8 in Jul 2007 to 14.3 in Jul 2014. The rate of youth unemployment increased from 9.1 percent in Dec 2006 to 12.3 percent in Dec 2013. The rate of youth unemployment increased from 10.9 percent in Jan 2007 to 14.9 percent in Jan and Feb 2014. The rate of youth unemployment increased from 9.7 percent in Mar 2007 to 14.3 percent in Mar 2014. The rate of youth unemployment increased from 9.7 percent in Apr 2007 to 11.9 percent in Apr 2014. The rate of youth unemployment increased from 10.2 percent in May 2007 to 13.4 percent in May 2014. The rate of youth unemployment increased from 12.0 percent in Jun 2007 to 15.0 percent in Jun 2014. The rate of youth unemployment increased from 10.8 in Jul 2007 to 14.3 in Jul 2014. The rate of youth unemployment increased from 10.5 in Aug 2007 to 13.0 in Aug 2014. The rate of youth unemployment increased from 11.0 in Sep 2007 to 13.6 in Sep 2014. The rate of youth unemployment increased from 10.3 in Oct 2007 to 12.2 in Oct 2014. The rate of youth unemployment increased from 10.3 in Nov 2007 to 11.7 in Nov 2014. The rate of youth unemployment increased from 10.7 in Dec 2007 to 11.2 in Dec 2014. The rate of youth unemployment increased from 10.9 in Jan 2007 to 12.9 in Jan 2015. The rate of youth unemployment increased from 10.3 percent in Feb 2007 to 12.2 percent in Feb 2015. The rate of youth unemployment increased from 9.7 in Mar 2007 to 12.3 in Mar 2015. The rate of youth unemployment increased from 9.7 in Apr 2007 to 10.7 in Apr 2015. The actual rate is higher because of the difficulty in counting those dropping from the labor force because they believe there are no jobs available for them.
Table I-12, US, Unemployment Rate 16-24 Years, Thousands, NSA
| Year | Jan | Feb | Mar | Apr | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
| 2001 | 10.3 | 10.3 | 10.2 | 9.6 | 10.5 | 10.7 | 10.5 | 11.0 | 11.2 | 11.0 | 10.6 |
| 2002 | 12.9 | 12.5 | 12.9 | 11.6 | 12.4 | 11.5 | 11.4 | 11.2 | 11.7 | 10.9 | 12.0 |
| 2003 | 12.7 | 12.7 | 12.2 | 12.0 | 13.3 | 11.9 | 12.5 | 11.6 | 11.6 | 10.5 | 12.4 |
| 2004 | 12.8 | 12.3 | 12.1 | 11.1 | 12.3 | 11.1 | 11.5 | 11.6 | 11.1 | 10.5 | 11.8 |
| 2005 | 12.4 | 13.0 | 11.7 | 11.2 | 11.0 | 10.8 | 10.7 | 10.3 | 10.7 | 9.4 | 11.3 |
| 2006 | 11.1 | 11.3 | 10.3 | 9.7 | 11.2 | 10.4 | 10.5 | 10.2 | 10.1 | 9.1 | 10.5 |
| 2007 | 10.9 | 10.3 | 9.7 | 9.7 | 10.8 | 10.5 | 11.0 | 10.3 | 10.3 | 10.7 | 10.5 |
| 2008 | 12.3 | 11.8 | 11.1 | 10.3 | 14.0 | 13.0 | 13.4 | 13.2 | 13.3 | 13.7 | 12.8 |
| 2009 | 15.8 | 16.4 | 16.1 | 15.8 | 18.5 | 18.0 | 18.2 | 18.5 | 18.1 | 17.5 | 17.6 |
| 2010 | 19.8 | 19.2 | 18.4 | 18.5 | 19.1 | 17.8 | 17.6 | 18.1 | 17.4 | 16.7 | 18.4 |
| 2011 | 18.9 | 18.2 | 17.2 | 16.5 | 18.1 | 17.5 | 17.0 | 16.2 | 15.9 | 15.5 | 17.3 |
| 2012 | 16.8 | 17.0 | 16.0 | 15.4 | 17.1 | 16.8 | 15.2 | 15.5 | 14.8 | 15.2 | 16.2 |
| 2013 | 17.6 | 16.7 | 15.9 | 15.1 | 16.3 | 15.6 | 14.8 | 14.4 | 13.1 | 12.3 | 15.5 |
| 2014 | 14.9 | 14.9 | 14.3 | 11.9 | 14.3 | 13.0 | 13.6 | 12.2 | 11.7 | 11.2 | 13.4 |
| 2015 | 12.9 | 12.2 | 12.3 | 10.7 |
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-23 provides the BLS estimate of the not-seasonally-adjusted rate of youth unemployment for ages 16 to 24 years from 2001 to 2015. The rate of youth unemployment increased sharply during the global recession of 2008 and 2009 but has failed to drop to earlier lower levels because of low growth of GDP. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E. Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent.
Chart I-23, US, Unemployment Rate 16-24 Years, Percent, NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-24 provides longer perspective with the rate of youth unemployment in ages 16 to 24 years from 1948 to 2015. The rate of youth unemployment rose to 20 percent during the contractions of the early 1980s and also during the contraction of the global recession in 2008 and 2009. The data illustrate again the argument in this blog that the contractions of the early 1980s are the valid framework for comparison with the global recession of 2008 and 2009 instead of misleading comparisons with the 1930s. During the initial phase of recovery, the rate of youth unemployment 16 to 24 years NSA fell from 18.9 percent in Jun 1983 to 14.5 percent in Jun 1984. In contrast, the rate of youth unemployment 16 to 24 years was nearly the same during the expansion after IIIQ2009: 17.5 percent in Dec 2009, 16.7 percent in Dec 2010, 15.5 percent in Dec 2011, 15.2 percent in Dec 2012, 17.6 percent in Jan 2013, 16.7 percent in Feb 2013, 15.9 percent in Mar 2013, 15.1 percent in Apr 2013. The rate of youth unemployment was 16.4 percent in May 2013, 18.0 percent in Jun 2013, 16.3 percent in Jul 2013 and 15.6 percent in Aug 2013. In Sep 2006, the rate of youth unemployment was 10.5 percent, increasing to 14.8 percent in Sep 2013. The rate of youth unemployment was 10.3 in Oct 2007, increasing to 14.4 percent in Oct 2013. The rate of youth unemployment was 10.3 percent in Nov 2007, increasing to 13.1 percent in Nov 2013. The rate of youth unemployment was 10.7 percent in Dec 2013, increasing to 12.3 percent in Dec 2013. The rate of youth unemployment was 10.9 percent in Jan 2007, increasing to 14.9 percent in Jan 2014. The rate of youth unemployment was 10.3 percent in Feb 2007, increasing to 14.9 percent in Feb 2014. The rate of youth unemployment was 9.7 percent in Mar 2007, increasing to 14.3 percent in Mar 2014. The rate of youth unemployment was 9.7 percent in Apr 2007, increasing to 11.9 percent in Apr 2014. The rate of youth unemployment was 10.2 percent in May 2007, increasing to 13.4 percent in May 2014. The rate of youth unemployment was 12.0 percent in Jun 2007, increasing to 15.0 percent in Jun 2014. The rate of youth unemployment was 10.8 percent in Jul 2007, increasing to 14.3 percent in Jul 2014. The rate of youth unemployment was 10.5 percent in Aug 2007, increasing to 13.0 percent in Aug 2014. The rate of youth unemployment was 11.0 percent in Sep 2007, increasing to 13.6 percent in Sep 2014. The rate of youth unemployment increased from 10.3 in Oct 2007 to 12.2 in Oct 2014. The rate of youth unemployment increased from 10.3 percent in Nov 2007 to 11.7 percent in Nov 2014. The rate of youth unemployment increased from 10.7 in Dec 2007 to 11.2 in Dec 2014. The rate of youth unemployment increased from 9.7 in Mar 2007 to 12.3 in Mar 2015. The rate of youth unemployment increased from 9.7 in Apr 2007 to 10.7 in Apr 2015. The actual rate is higher because of the difficulty in counting those dropping from the labor force because they believe there are no jobs available for them. The difference originates in the vigorous seasonally-adjusted annual equivalent average rate of GDP growth of 5.9 percent during the recovery from IQ1983 to IVQ1985 and 4.8 percent from IQ1983 to IIIQ1988 compared with 2.2 percent on average during the first 23 quarters of expansion from IIIQ2009 to IQ2015. US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 23 quarters from IIIQ2009 to IQ2015. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the first estimate of GDP for IQ2015 (http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp1q15_adv.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,745.9 billion in IIQ2010 by GDP of $14,355.6 billion in IIQ2009 {[$14,745.9/$14,355.6 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988 and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation.
Chart I-24, US, Unemployment Rate 16-24 Years, Percent NSA, 1948-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
It is more difficult to move to other jobs after a certain age because of fewer available opportunities for mature individuals than for new entrants into the labor force. Middle-aged unemployed are less likely to find another job. Table I-13 provides the unemployment level ages 45 years and over. The number unemployed ages 45 years and over rose from 1.607 million in Oct 2006 to 4.576 million in Oct 2010 or by 184.8 percent. The number of unemployed ages 45 years and over declined to 3.800 million in Oct 2012 that is still higher by 136.5 percent than in Oct 2006. The number unemployed age 45 and over increased from 1.704 million in Nov 2006 to 3.861 million in Nov 2012, or 126.6 percent. The number unemployed age 45 and over is still higher by 98.5 percent at 3.383 million in Nov 2013 than 1.704 million in Nov 2006. The number unemployed age 45 and over jumped from 1.794 million in Dec 2006 to 4.762 million in Dec 2010 or 165.4 percent. At 3.927 million in Dec 2012, mature unemployment is higher by 2.133 million or 118.9 percent higher than 1.794 million in Dec 2006. The level of unemployment of those aged 45 year or more of 3.632 million in Oct 2013 is higher by 2.025 million than 1.607 million in Oct 2006 or higher by 126.0 percent. The number of unemployed 45 years and over increased from 1.794 million in Dec 2006 to 3.378 million in Nov 2013 or 88.3 percent. The annual number of unemployed 45 years and over increased from 1.848 million in 2006 to 3.719 million in 2013 or 101.2 percent. The number of unemployed 45 years and over increased from 2.126 million in Jan 2006 to 4.394 million in Jan 2013, by 2.618 million or 106.7 percent. The number of unemployed 45 years and over rose from 2.126 million in Jan 2006 to 3.508 million in Jan 2014, by 1.382 million or 65.0 percent. The level of unemployed 45 years or older increased 2.051 million or 99.8 percent from 2.056 million in Feb 2006 to 4.107 million in Feb 2013 and at 3.490 million in Feb 2014 is higher by 69.7 percent than in Feb 2006. The number of unemployed 45 years and over increased 2.048 million or 108.9 percent from 1.881 million in Mar 2006 to 3.929 million in Mar 2013 and at 3.394 million in Mar 2014 is higher by 80.4 percent than in Mar 2006. The number of unemployed 45 years and over increased 1.846 million or 100.2 percent from 1.843 million in Apr 2006 to 3.689 million in Apr 2013 and at 3.006 million in Apr 2014 is higher by 1.163 million or 63.1 percent. The number of unemployed ages 45 years and over increased 102.1 percent from 1.784 million in May 2006 to 3.605 million in May 2014 and at 2.913 million in May 2014 is higher by 63.3 percent than in May 2007.
The number of unemployed ages 45 years and over increased 102.1 percent from 1.805 million in Jun 2007 to 3.648 million in Jun 2013 and at 2.832 million in Jun 2014 is higher by 56.9 percent than in Jun 2007. The number of unemployed ages 45 years and over increased 81.5 percent from 2.053 million in Jul 2007 to 3.727 million in Jul 2013 and at 3.083 million in Jul 2014 is higher by 50.2 percent than in Jul 2007. The level unemployed ages 45 years and over increased 84.4 percent from 1.956 million in Aug 2007 to 3.607 million in Aug 2013 and at 3.037 million in Aug 2014 is 55.2 percent higher than in Aug 2007. The level unemployed ages 45 years and over increased 90.7 percent from 1.854 million in Sep 2007 to 3.535 million in Sep 2013 and at 2.640 million in Sep 2014 is 42.4 percent higher than in Sep 2007. The level unemployed ages 45 years and over increased 1.747 million from 1.885 million in Oct 2007 to 3.632 million in Oct 2013 and at 2.606 million in Oct 2014 is 38.2 percent higher than in Oct 2007. The level unemployed ages 45 years and over increased 1.458 million from 1.925 million in Nov 2007 to 3.383 million in Nov 2013 and at 2.829 million in Nov 2014 is 47.0 percent higher than in Nov 2007. The level of unemployed ages 45 years and over increased 1.258 million from Dec 2007 to Dec 2013 and at 2.667 million in Dec 2014 is 25.8 higher than in Dec 2007. The level unemployed ages 45 years and over increased 1.353 million from Jan 2007 to Jan 2015 and at 3.077 million in Jan 2015 is 42.8 percent higher than in Jan 2007. The level unemployed ages 45 years and over increased 1.352 million from 2.138 million in Feb 2007 to 3.490 million in Feb 2014 and at 2.991 million in Feb 2015 is 39.9 percent higher than in Feb 2007. The level of unemployed ages 45 years and over increased 1.363 million from 2.031 million in Mar 2007 to 3.394 million in Mar 2014 and at 2.724 million in Mar 2015 is 34.1 percent higher than in Mar 2007. The level of unemployed ages 45 years and over increased from 1.135 million in Apr 2007 to 3.006 million in Apr 2014 and at 2.579 million in Apr 2015 is 37.8 higher than in Apr 2007. The actual number unemployed is likely much higher because many are not accounted who abandoned job searches in frustration there may not be a job for them. Recent improvements may be illusory.
Table I-13, US, Unemployment Level 45 Years and Over, Thousands NSA
| Year | Jan | Feb | Mar | Apr | Sep | Oct | Nov | Dec | Annual |
| 2000 | 1498 | 1392 | 1291 | 1062 | 1254 | 1202 | 1242 | 1217 | 1249 |
| 2001 | 1572 | 1587 | 1533 | 1421 | 1586 | 1722 | 1786 | 1901 | 1576 |
| 2002 | 2235 | 2280 | 2138 | 2101 | 1966 | 1945 | 2013 | 2210 | 2114 |
| 2003 | 2495 | 2415 | 2485 | 2287 | 2157 | 2032 | 2132 | 2130 | 2253 |
| 2004 | 2453 | 2397 | 2354 | 2160 | 1951 | 1931 | 2053 | 2086 | 2149 |
| 2005 | 2286 | 2286 | 2126 | 1939 | 1992 | 1875 | 1920 | 1963 | 2009 |
| 2006 | 2126 | 2056 | 1881 | 1843 | 1710 | 1607 | 1704 | 1794 | 1848 |
| 2007 | 2155 | 2138 | 2031 | 1871 | 1854 | 1885 | 1925 | 2120 | 1966 |
| 2008 | 2336 | 2336 | 2326 | 2104 | 2595 | 2728 | 3078 | 3485 | 2540 |
| 2009 | 4138 | 4380 | 4518 | 4172 | 4560 | 4492 | 4655 | 4960 | 4500 |
| 2010 | 5314 | 5307 | 5194 | 4770 | 4640 | 4576 | 4909 | 4762 | 4879 |
| 2011 | 5027 | 4837 | 4748 | 4373 | 4426 | 4375 | 4195 | 4182 | 4537 |
| 2012 | 4458 | 4472 | 4390 | 4037 | 3899 | 3800 | 3861 | 3927 | 4133 |
| 2013 | 4394 | 4107 | 3929 | 3689 | 3535 | 3632 | 3383 | 3378 | 3719 |
| 2014 | 3508 | 3490 | 3394 | 3006 | 2640 | 2606 | 2829 | 2667 | 3000 |
| 2015 | 3077 | 2991 | 2724 | 2579 |
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-25 provides the level unemployed ages 45 years and over. There was an increase in the recessions of the 1980s, 1991 and 2001 followed by declines to earlier levels. The current expansion of the economy after IIIQ2009 has not been sufficiently vigorous to reduce significantly middle-age unemployment. Recent improvements could be illusory because many abandoned job searches in frustration that there may not be jobs for them and are not counted as unemployed.
Chart I-25, US, Unemployment Level Ages 45 Years and Over, Thousands, NSA, 1976-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
II United States Industrial Production. There is socio-economic stress in the combination of adverse events and cyclical performance:
- Mediocre economic growth below potential and long-term trend, resulting in idle productive resources with GDP two trillion dollars below trend (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html). US GDP grew at the average rate of 3.3 percent per year from 1929 to 2014 with similar performance in whole cycles of contractions and expansions but only at 1.1 percent per year on average from 2007 to 2014. GDP in IQ2015 is 12.2 percent lower than what it would have been had it grown at trend of 3.0 percent
- Private fixed investment stagnating at increase of 2.7 percent in the entire cycle from IVQ2007 to IQ2015 (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html)
- Twenty six million or 15.4 percent of the effective labor force unemployed or underemployed in involuntary part-time jobs with stagnating or declining real wages (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html)
- Stagnating real disposable income per person or income per person after inflation and taxes (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html)
- Depressed hiring that does not afford an opportunity for reducing unemployment/underemployment and moving to better-paid jobs (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html)
- Productivity growth fell from 2.2 percent per year on average from 1947 to 2014 and average 2.3 percent per year from 1947 to 2007 to 1.4 percent per year on average from 2007 to 2014, deteriorating future growth and prosperity (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html)
- Output of manufacturing in Apr 2015 at 19.7 percent below long-term trend since 1919 and at 14.4 percent below trend since 1986 (Section II and earlier http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Unsustainable government deficit/debt and balance of payments deficit (http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Worldwide waves of inflation (http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html)
- Deteriorating terms of trade and net revenue margins of production across countries in squeeze of economic activity by carry trades induced by zero interest rates (http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Financial repression of interest rates and credit affecting the most people without means and access to sophisticated financial investments with likely adverse effects on income distribution and wealth disparity (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/growth-uncertainties-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/world-financial-turbulence-twenty-seven.html)
- 45 million in poverty and 41 million without health insurance with family income adjusted for inflation regressing to 1995 levels (http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Net worth of households and nonprofits organizations increasing by 11.1 percent after adjusting for inflation in the entire cycle from IVQ2007 to IVQ2014 when it would have grown over 23.8 percent at trend of 3.1 percent per year in real terms from 1945 to 2014 (http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html). Financial assets increased $15.0 trillion while nonfinancial assets increased $898.5 billion with likely concentration of wealth in those with access to sophisticated financial investments. Real estate assets adjusted for inflation fell 9.9 percent from 2007 to IVQ2014
Industrial production decreased 0.3 percent in Apr 2015 and decreased 0.3 percent in Mar 2015 after decreasing 0.1 percent in Feb 2015, with all data seasonally adjusted, as shown in Table I-1. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):
“Industrial production decreased 0.3 percent in April for its fifth consecutive monthly loss. Manufacturing output was unchanged in April after recording an upwardly revised gain of 0.3 percent in March. In April, the index for mining moved down 0.8 percent, its fourth consecutive monthly decrease; a sharp fall in oil and gas well drilling has more than accounted for the overall decline in mining this year. The output of utilities fell 1.3 percent in April. At 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.” In the six months ending in Apr 2015, United States national industrial production accumulated change of 0.0 percent at the annual equivalent rate of 0.0 percent, which is lower than growth of 1.9 percent in the 12 months ending in Apr 2015. Excluding growth of 1.1 percent in Nov 2014, growth in the remaining five months from Nov 2014 to Apr 2015 accumulated to minus 1.1 percent or minus 2.6 percent annual equivalent. Industrial production declined in five of the past six months. Industrial production contracted at annual equivalent 2.8 percent in the most recent quarter from Feb 2015 to Apr 2015 and expanded at 2.8 percent in the prior quarter Nov 2014 to Jan 2015. Business equipment accumulated growth of 0.0 percent in the six months from Nov 2014 to Apr 2015 at the annual equivalent rate of 0.0 percent, which is lower than growth of 2.2 percent in the 12 months ending in Apr 2015. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and weakening growth in past months.
Table I-1, US, Industrial Production and Capacity Utilization, SA, ∆%
| 2014-2015 | Apr 15 | Mar 15 | Feb 15 | Jan 15 | Dec 14 | Nov 14 | Apr 15/ Apr 14 |
| Total | -0.3 | -0.3 | -0.1 | -0.3 | -0.1 | 1.1 | 1.9 |
| Market | |||||||
| Final Products | -0.5 | -0.3 | 0.2 | -0.3 | -0.7 | 1.8 | 0.8 |
| Consumer Goods | -0.3 | -0.1 | 0.5 | 0.3 | -0.5 | 2.2 | 1.7 |
| Business Equipment | -0.4 | 0.4 | 0.7 | -0.9 | -1.3 | 1.5 | 2.2 |
| Non | 0.2 | -0.9 | 0.1 | 0.2 | -0.2 | 0.7 | 2.8 |
| Construction | 0.1 | -1.3 | -0.6 | -0.5 | 1.2 | 0.0 | 3.6 |
| Materials | -0.2 | -0.2 | -0.3 | -0.5 | 0.5 | 0.6 | 2.6 |
| Industry Groups | |||||||
| Manufacturing | 0.0 | 0.3 | -0.2 | -0.6 | 0.0 | 1.2 | 2.3 |
| Mining | -0.8 | -0.1 | -2.1 | -1.2 | 2.6 | -0.5 | 1.3 |
| Utilities | -1.3 | -5.4 | 4.9 | 3.3 | -5.0 | 3.6 | 0.1 |
| Capacity | 78.2 | 78.6 | 78.9 | 79.2 | 79.5 | 79.8 | 2.9 |
Sources: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Manufacturing changed 0.0 percent in Apr 2015 after increasing 0.3 percent in Mar 2015 and decreasing 0.2 percent in Feb 2015 seasonally adjusted, increasing 2.3 percent not seasonally adjusted in the 12 months ending in Apr 2015, as shown in Table I-2. Manufacturing grew cumulatively 0.7 percent in the six months ending in Apr 2015 or at the annual equivalent rate of 1.4 percent. Excluding the increase of 1.2 percent in Nov 2014, manufacturing contracted 0.5 percent from Nov 2014 to Apr 2015 or at the annual equivalent rate of minus 1.2 percent. Table I-2 provides a longer perspective of manufacturing in the US. There has been evident deceleration of manufacturing growth in the US from 2010 and the first three months of 2011 with recovery followed by renewed deterioration in more recent months as shown by 12 months rates of growth. Growth rates appeared to be increasing again closer to 5 percent in Apr-Jun 2012 but deteriorated. The rates of decline of manufacturing in 2009 are quite high with a drop of 18.2 percent in the 12 months ending in Apr 2009. Manufacturing recovered from this decline and led the recovery from the recession. Rates of growth appeared to be returning to the levels at 3 percent or higher in the annual rates before the recession but the pace of manufacturing fell steadily with some strength at the margin. There is renewed deterioration. The Board of Governors of the Federal Reserve System conducted the annual revision of industrial production released on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm):
“The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. The annual revision for 2014 was more limited than in recent years because the source data required to extend the annual benchmark indexes of production into 2012 were mostly unavailable. Consequently, the IP indexes published with this revision are very little changed from previous estimates. Measured from fourth quarter to fourth quarter, total IP is now reported to have increased about 3 1/3 percent in each year from 2011 to 2013. Relative to the rates of change for total IP published earlier, the new rates are 1/2 percentage point higher in 2012 and little changed in any other year. Total IP still shows a peak-to-trough decline of about 17 percent for the most recent recession, and it still returned to its pre-recession peak in the fourth quarter of 2013.”
The bottom part of Table I-2 shows decline of manufacturing by 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increase by 25.1 percent from the trough in Apr 2009 to Dec 2014. Manufacturing grew 25.7 percent from the trough in Apr 2009 to Apr 2015. Manufacturing output in Apr 2015 is 1.9 percent below the peak in Jun 2007. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation.
Table I-2, US, Monthly and 12-Month Rates of Growth of Manufacturing ∆%
| Month SA ∆% | 12-Month NSA ∆% | |
| Apr 2015 | 0.0 | 2.3 |
| Mar | 0.3 | 2.6 |
| Feb | -0.2 | 3.1 |
| Jan | -0.6 | 4.6 |
| Dec 2014 | 0.0 | 4.4 |
| Nov | 1.2 | 4.4 |
| Oct | 0.2 | 3.4 |
| Sep | 0.2 | 3.6 |
| Aug | -0.3 | 3.9 |
| Jul | 0.8 | 4.3 |
| Jun | 0.4 | 3.6 |
| May | 0.4 | 3.6 |
| Apr | 0.3 | 3.0 |
| Mar | 0.8 | 3.4 |
| Feb | 1.3 | 2.4 |
| Jan | -1.0 | 1.4 |
| Dec 2013 | 0.2 | 2.2 |
| Nov | 0.3 | 2.8 |
| Oct | 0.4 | 3.7 |
| Sep | 0.3 | 2.8 |
| Aug | 0.7 | 2.9 |
| Jul | -0.4 | 1.7 |
| Jun | 0.3 | 2.3 |
| May | 0.3 | 2.4 |
| Apr | -0.2 | 2.7 |
| Mar | 0.1 | 2.6 |
| Feb | 0.6 | 2.5 |
| Jan | -0.2 | 2.9 |
| Dec 2012 | 0.7 | 3.8 |
| Nov | 1.3 | 3.8 |
| Oct | -0.4 | 2.6 |
| Sep | 0.2 | 3.5 |
| Aug | -0.5 | 3.8 |
| Jul | 0.4 | 4.3 |
| Jun | 0.4 | 5.0 |
| May | -0.2 | 4.9 |
| Apr | 0.8 | 5.1 |
| Mar | -0.3 | 3.8 |
| Feb | 0.6 | 5.1 |
| Jan | 1.0 | 4.0 |
| Dec 2011 | 0.7 | 3.5 |
| Nov | -0.1 | 2.9 |
| Oct | 0.5 | 3.0 |
| Sep | 0.4 | 2.9 |
| Aug | 0.3 | 2.3 |
| Jul | 0.8 | 2.6 |
| Jun | 0.1 | 2.1 |
| May | 0.2 | 1.9 |
| Apr | -0.6 | 3.2 |
| Mar | 0.7 | 4.9 |
| Feb | 0.0 | 5.4 |
| Jan | 0.2 | 5.7 |
| Dec 2010 | 0.4 | 6.3 |
| Nov | 0.2 | 5.4 |
| Oct | 0.1 | 6.6 |
| Sep | 0.1 | 6.9 |
| Aug | 0.1 | 7.4 |
| Jul | 0.8 | 7.8 |
| Jun | 0.0 | 9.3 |
| May | 1.5 | 8.8 |
| Apr | 0.9 | 7.0 |
| Mar | 1.3 | 4.8 |
| Feb | -0.1 | 1.3 |
| Jan | 1.1 | 1.2 |
| Dec 2009 | -0.1 | -3.1 |
| Nov | 1.0 | -6.0 |
| Oct | 0.2 | -9.1 |
| Sep | 0.8 | -10.6 |
| Aug | 1.0 | -13.6 |
| Jul | 1.4 | -15.2 |
| Jun | -0.3 | -17.7 |
| May | -1.1 | -17.6 |
| Apr | -0.7 | -18.2 |
| Mar | -1.8 | -17.3 |
| Feb | -0.3 | -16.1 |
| Jan | -2.9 | -16.4 |
| Dec 2008 | -3.4 | -13.9 |
| Nov | -2.4 | -11.3 |
| Oct | -0.6 | -8.9 |
| Sep | -3.4 | -8.5 |
| Aug | -1.2 | -5.0 |
| Jul | -1.1 | -3.5 |
| Jun | -0.6 | -3.1 |
| May | -0.5 | -2.4 |
| Apr | -1.1 | -1.1 |
| Mar | -0.3 | -0.6 |
| Feb | -0.6 | 0.9 |
| Jan | -0.4 | 2.2 |
| Dec 2007 | 0.1 | 1.9 |
| Nov | 0.5 | 3.3 |
| Oct | -0.4 | 2.8 |
| Sep | 0.5 | 2.9 |
| Aug | -0.4 | 2.6 |
| Jul | 0.2 | 3.5 |
| Jun | 0.3 | 3.0 |
| May | -0.1 | 3.1 |
| Apr | 0.7 | 3.6 |
| Mar | 0.8 | 2.5 |
| Feb | 0.4 | 1.6 |
| Jan | -0.5 | 1.3 |
| Dec 2006 | 2.7 | |
| Dec 2005 | 3.5 | |
| Dec 2004 | 3.8 | |
| Dec 2003 | 2.0 | |
| Dec 2002 | 2.4 | |
| Dec 2001 | -5.7 | |
| Dec 2000 | 0.7 | |
| Dec 1999 | 5.3 | |
| Average ∆% Dec 1986-Dec 2014 | 2.4 | |
| Average ∆% Dec 1986-Dec 2013 | 2.3 | |
| Average ∆% Dec 1986-Dec 1999 | 4.2 | |
| Average ∆% Dec 1999-Dec 2006 | 1.3 | |
| Average ∆% Dec 1999-Dec 2014 | 0.8 | |
| ∆% Peak 103.0351 in 06/2007 to 100.6442 in 12/2014 | -2.3 | |
| ∆% Peak 103.0351 in 06/2007 to Trough 80.4551 in 4/2009 | -21.9 | |
| ∆% Trough 80.4551 in 04/2009 to 100.6442 in 12/2014 | 25.1 | |
| ∆% Trough 80.4551 in 04/2009 to 101.1122 in 4/2015 | 25.7 | |
| ∆% Peak 103.0351 on 06/2007 to 101.1122 in 4/2015 | -1.9 |
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Chart I-1 of the Board of Governors of the Federal Reserve System provides industrial production, manufacturing and capacity since the 1970s. There was acceleration of growth of industrial production, manufacturing and capacity in the 1990s because of rapid growth of productivity in the US (Cobet and Wilson (2002); see Pelaez and Pelaez, The Global Recession Risk (2007), 135-44). The slopes of the curves flatten in the 2000s. Production and capacity have not recovered sufficiently above levels before the global recession, remaining like GDP below historical trend. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977).
Chart I-1, US, Industrial Production, Capacity and Utilization
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/ipg1.gif
The modern industrial revolution of Jensen (1993) is captured in Chart I-2 of the Board of Governors of the Federal Reserve System (for the literature on M&A and corporate control see Pelaez and Pelaez, Regulation of Banks and Finance (2009a), 143-56, Globalization and the State, Vol. I (2008a), 49-59, Government Intervention in Globalization (2008c), 46-49). The slope of the curve of total industrial production accelerates in the 1990s to a much higher rate of growth than the curve excluding high-technology industries. Growth rates decelerate into the 2000s and output and capacity utilization have not recovered fully from the strong impact of the global recession. Growth in the current cyclical expansion has been more subdued than in the prior comparably deep contractions in the 1970s and 1980s. Chart II-2 shows that the past recessions after World War II are the relevant ones for comparison with the recession after 2007 instead of common comparisons with the Great Depression (http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html). The bottom left-hand part of Chart II-2 shows the strong growth of output of communication equipment, computers and semiconductor that continued from the 1990s into the 2000s. Output of semiconductors has already surpassed the level before the global recession.
Chart I-2, US, Industrial Production, Capacity and Utilization of High Technology Industries
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/ipg3.gif
Additional detail on industrial production and capacity utilization is provided in Chart I-3 of the Board of Governors of the Federal Reserve System. Production of consumer durable goods fell sharply during the global recession by more than 30 percent and is oscillating above the level before the contraction. Output of nondurable consumer goods fell around 10 percent and is some 5 percent below the level before the contraction. Output of business equipment fell sharply during the contraction of 2001 but began rapid growth again after 2004. An important characteristic is rapid growth of output of business equipment in the cyclical expansion after sharp contraction in the global recession. Output of defense and space only suffered reduction in the rate of growth during the global recession and surged ahead of the level before the contraction. Output of construction supplies collapsed during the global recession and is well below the level before the contraction. Output of energy materials was stagnant before the contraction but has recovered sharply above the level before the contraction.
Chart I-3, US, Industrial Production and Capacity Utilization
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/ipg2.gif
United States manufacturing output from 1919 to 2015 on a monthly basis is in Chart I-4 of the Board of Governors of the Federal Reserve System. The second industrial revolution of Jensen (1993) is quite evident in the acceleration of the rate of growth of output given by the sharper slope in the 1980s and 1990s. Growth was robust after the shallow recession of 2001 but dropped sharply during the global recession after IVQ2007. Manufacturing output recovered sharply but has not reached earlier levels and is losing momentum at the margin. Current output is well below the extrapolation of a long-term trend. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation.
Chart I-4, US, Manufacturing Output, 1919-2015
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Manufacturing jobs not seasonally adjusted increased 192,000 from Apr 2014 to
Apr 2015 or at the average monthly rate of 16,000. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. Industrial production decreased 0.3 percent in Apr 2015 and decreased 0.3 percent in Mar 2015 after decreasing 0.1 percent in Feb 2015, with all data seasonally adjusted. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):
“Industrial production decreased 0.3 percent in April for its fifth consecutive monthly loss. Manufacturing output was unchanged in April after recording an upwardly revised gain of 0.3 percent in March. In April, the index for mining moved down 0.8 percent, its fourth consecutive monthly decrease; a sharp fall in oil and gas well drilling has more than accounted for the overall decline in mining this year. The output of utilities fell 1.3 percent in April. At 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.” In the six months ending in Apr 2015, United States national industrial production accumulated change of 0.0 percent at the annual equivalent rate of 0.0 percent, which is lower than growth of 1.9 percent in the 12 months ending in Apr 2015. Excluding growth of 1.1 percent in Nov 2014, growth in the remaining five months from Nov 2014 to Apr 2015 accumulated to minus 1.1 percent or minus 2.6 percent annual equivalent. Industrial production declined in five of the past six months. Industrial production contracted at annual equivalent 2.8 percent in the most recent quarter from Feb 2015 to Apr 2015 and expanded at 2.8 percent in the prior quarter Nov 2014 to Jan 2015. Business equipment accumulated growth of 0.0 percent in the six months from Nov 2014 to Apr 2015 at the annual equivalent rate of 0.0 percent, which is lower than growth of 2.2 percent in the 12 months ending in Apr 2015. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and weakening growth in past months.
Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 25.1 percent from the trough in Apr 2009 to Dec 2014. Manufacturing grew 25.7 percent from the trough in Apr 2009 to Apr 2015. Manufacturing output in Apr 2015 is 1.9 percent below the peak in Jun 2007. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 percent below trend under this alternative calculation. Table I-13 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 87.6 percent in IVQ2014. Most of US national income is in the form of services. In Apr 2015, there were 141.462 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 119.126 million NSA in Apr 2015 accounted for 84.2 percent of total nonfarm jobs of 141.462 million, of which 12.272 million, or 10.3 percent of total private jobs and 8.7 percent of total nonfarm jobs, were in manufacturing. Private service-providing jobs were 99.738 million NSA in Apr 2015, or 70.5 percent of total nonfarm jobs and 83.7 percent of total private-sector jobs. Manufacturing has share of 11.3 percent in US national income in IVQ2014 and durable goods 6.5 percent, as shown in Table I-13. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.
Table I-13, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total
| SAAR IIIQ2014 | % Total | SAAR | % Total | |
| National Income WCCA | 15,494.0 | 100.0 | 15,575.3 | 100.0 |
| Domestic Industries | 15,264.1 | 98.5 | 15,382.8 | 98.8 |
| Private Industries | 13,538.5 | 87.4 | 13,649.7 | 87.6 |
| Agriculture | 167.6 | 1.1 | 168.7 | 1.1 |
| Mining | 273.9 | 1.8 | 266.7 | 1.7 |
| Utilities | 221.8 | 1.4 | 212.8 | 1.4 |
| Construction | 681.7 | 4.4 | 694.5 | 4.5 |
| Manufacturing | 1743.0 | 11.2 | 1759.9 | 11.3 |
| Durable Goods | 1002.2 | 6.5 | 1013.6 | 6.5 |
| Nondurable Goods | 740.8 | 4.8 | 746.3 | 4.8 |
| Wholesale Trade | 944.4 | 6.1 | 954.3 | 6.1 |
| Retail Trade | 1055.1 | 6.8 | 1081.1 | 6.9 |
| Transportation & WH | 479.8 | 3.1 | 476.6 | 3.1 |
| Information | 574.9 | 3.7 | 578.1 | 3.7 |
| Finance, Insurance, RE | 2794.1 | 18.0 | 2765.8 | 17.8 |
| Professional & Business Services | 2066.4 | 13.3 | 2109.5 | 13.5 |
| Education, Health Care | 1494.6 | 9.6 | 1515.6 | 9.7 |
| Arts, Entertainment | 609.4 | 3.9 | 627.7 | 4.0 |
| Other Services | 431.9 | 2.8 | 438.5 | 2.8 |
| Government | 1725.6 | 11.1 | 1733.1 | 11.1 |
| Rest of the World | 229.9 | 1.5 | 192.5 | 1.2 |
Notes: SSAR: Seasonally-Adjusted Annual Rate; WCCA: Without Capital Consumption Adjustment by Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art, Entertainment includes recreation, accommodation and food services; BS: business services
Source: US Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
Motor vehicle sales and production in the US have been in long-term structural change. Table VA-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Apr 2015, light vehicle sales accumulated to 5,409,495, which is higher by 5.4 percent relative to 5,134,255 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 16.50 million in Apr 2015, lower than 17.15 million in Mar 2015 and higher than 16.05 million in Apr 2014 (http://motorintelligence.com/m_frameset.html).
Table VA-1, US, New Motor Vehicle Sales and Car Production, Thousand Units
| New Motor Vehicle Sales | New Car Sales and Leases | New Truck Sales and Leases | Domestic Car Production | |
| 1990 | 14,137 | 9,300 | 4,837 | 6,231 |
| 1991 | 12,725 | 8,589 | 4,136 | 5,454 |
| 1992 | 13,093 | 8,215 | 4,878 | 5,979 |
| 1993 | 14,172 | 8,518 | 5,654 | 5,979 |
| 1994 | 15,397 | 8,990 | 6,407 | 6,614 |
| 1995 | 15,106 | 8,536 | 6,470 | 6,340 |
| 1996 | 15,449 | 8,527 | 6,922 | 6,081 |
| 1997 | 15,490 | 8,273 | 7,218 | 5,934 |
| 1998 | 15,958 | 8,142 | 7,816 | 5,554 |
| 1999 | 17,401 | 8,697 | 8,704 | 5,638 |
| 2000 | 17,806 | 8,852 | 8,954 | 5,542 |
| 2001 | 17,468 | 8,422 | 9,046 | 4,878 |
| 2002 | 17,144 | 8,109 | 9,036 | 5,019 |
| 2003 | 16,968 | 7,611 | 9,357 | 4,510 |
| 2004 | 17,298 | 7,545 | 9,753 | 4,230 |
| 2005 | 17,445 | 7,720 | 9,725 | 4,321 |
| 2006 | 17,049 | 7,821 | 9,228 | 4,367 |
| 2007 | 16,460 | 7,618 | 8,683 | 3,924 |
| 2008 | 13,494 | 6,814 | 6.680 | 3,777 |
| 2009 | 10,601 | 5,456 | 5,154 | 2,247 |
| 2010 | 11,772 | 5,729 | 6,044 | 2,840 |
Source: US Census Bureau
http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.html
Chart I-5 of the Board of Governors of the Federal Reserve provides output of motor vehicles and parts in the United States from 1972 to 2015. Output virtually stagnated since the late 1990s.
Chart 1-5, US, Motor Vehicles and Parts Output, 1972-2015
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Chart I-6 of the Board of Governors of the Federal Reserve System provides output of computers and electronic products in the United States from 1972 to 2015. Output accelerated sharply in the 1990s and 2000s and has surpassed the level before the global recession beginning in IVQ2007.
Chart I-6, US, Output of Computers and Electronic Products, 1972-2015
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Chart I-7 of the Board of Governors of the Federal Reserve System shows that output of durable manufacturing accelerated in the 1980s and 1990s with slower growth in the 2000s perhaps because processes matured. Growth was robust after the major drop during the global recession but appears to vacillate in the final segment.
Chart I-7, US, Output of Durable Manufacturing, 1972-2015
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Chart I-8 of the Board of Governors of the Federal Reserve System provides output of aerospace and miscellaneous transportation equipment from 1972 to 2015. There is long-term upward trend with oscillations around the trend and cycles of large amplitude.
Chart I-8, US, Output of Aerospace and Miscellaneous Transportation Equipment, 1972-2015
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
The Empire State Manufacturing Survey Index in Table VA-1 provides continuing deterioration that started in Jun 2012 well before Hurricane Sandy in Oct 2012. The current general index has been in negative contraction territory from minus 3.84 in Aug 2012 to minus 9.56 in Jan 2013 and minus 1.72 in May 2013. The current general index changed to 3.09 in May 2015. The index of current orders has also been in negative contraction territory from minus 3.51 in Aug 2012 to minus 10.59 in Jan 2013 and minus 5.39 in Jun 2013. The index of current new orders changed to 3.85 in Apr 2015. Number of workers and hours worked have registered negative or declining readings since Sep 2012 with 5.21 for number of workers in May 2015 and weakness of minus 2.08 for average workweek. There is improvement in the general index for the next six months at 29.81 in May 2015 and new orders at 33.94.
Table VA-1, US, New York Federal Reserve Bank Empire State Manufacturing Survey Index SA
| Current | General Index | New Orders | Shipments | Number of Workers | Average Workweek |
| Sep-11 | -4.87 | -4.51 | -7.19 | -5.43 | -2.17 |
| Oct-11 | -4.97 | 1.2 | 1.96 | 3.37 | -4.49 |
| Nov-11 | 4.11 | 0.62 | 12.66 | -3.66 | 2.44 |
| Dec-11 | 12.74 | 9.64 | 22.81 | 2.33 | -2.33 |
| Jan-12 | 10.2 | 8.82 | 18.4 | 12.09 | 6.59 |
| Feb-12 | 16.5 | 5.94 | 17.74 | 11.76 | 7.06 |
| Mar-12 | 16.35 | 4.79 | 15.02 | 13.58 | 18.52 |
| Apr-12 | 7.43 | 5.69 | 6.7 | 19.28 | 6.02 |
| May-12 | 14.05 | 9.04 | 22.5 | 20.48 | 12.05 |
| Jun-12 | 2.82 | 3.57 | 12.34 | 12.37 | 3.09 |
| Jul-12 | 4.48 | -3.04 | 9.5 | 18.52 | 0 |
| Aug-12 | -3.84 | -3.51 | 7.08 | 16.47 | 3.53 |
| Sep-12 | -7.69 | -10.68 | 4.21 | 4.26 | -1.06 |
| Oct-12 | -3.31 | -7.63 | -6.55 | -1.08 | -4.3 |
| Nov-12 | -1.65 | 4.94 | 16.2 | -14.61 | -7.87 |
| Dec-12 | -4.71 | -0.38 | 11.22 | -9.68 | -10.75 |
| Jan-13 | -9.56 | -10.59 | -4.09 | -4.3 | -5.38 |
| Feb-13 | 7.47 | 10.8 | 10.55 | 8.08 | -4.04 |
| Mar-13 | 6.94 | 5.89 | 7 | 3.23 | 0 |
| Apr-13 | 4.1 | 3.05 | 3.94 | 6.82 | 5.68 |
| May-13 | -1.72 | -0.98 | -1.16 | 5.68 | -1.14 |
| Jun-13 | 6.25 | -5.39 | -5.14 | 0 | -11.29 |
| Jul-13 | 6.63 | 3.09 | 6.26 | 3.26 | -7.61 |
| Aug-13 | 8.58 | 1.76 | 2.16 | 10.84 | 4.82 |
| Sep-13 | 6.47 | 2.1 | 12.64 | 7.53 | 1.08 |
| Oct-13 | 5.36 | 7.3 | 14.26 | 3.61 | 3.61 |
| Nov-13 | 1.08 | -3.42 | 0.75 | 0 | -5.26 |
| Dec-13 | 4.79 | 0.35 | 7.05 | 0 | -10.84 |
| Jan-14 | 10.35 | 8.33 | 13.9 | 12.2 | 1.22 |
| Feb-14 | 4.34 | 0.37 | 2.74 | 11.25 | 3.75 |
| Mar-14 | 5.92 | 3.38 | 6.1 | 5.88 | 4.71 |
| Apr-14 | 3.49 | -0.94 | 7.72 | 8.16 | 2.04 |
| May-14 | 16.95 | 10.03 | 16.99 | 20.88 | 2.2 |
| Jun-14 | 18.16 | 16.63 | 15.57 | 10.75 | 9.68 |
| Jul-14 | 22.6 | 17.79 | 21.01 | 17.05 | 2.27 |
| Aug-14 | 15.1 | 14.24 | 21.93 | 13.64 | 7.95 |
| Sep-14 | 27.41 | 16.35 | 23.24 | 3.26 | 3.26 |
| Oct-14 | 8.55 | -1.01 | 2.67 | 10.23 | -1.14 |
| Nov-14 | 10.33 | 9.12 | 10.61 | 8.51 | -7.45 |
| Dec-14 | -1.23 | 0.39 | 2.55 | 8.33 | -11.46 |
| Jan-15 | 9.95 | 6.09 | 9.59 | 13.68 | -8.42 |
| Feb-15 | 7.78 | 1.22 | 14.12 | 10.11 | -1.12 |
| Mar-15 | 6.9 | -2.39 | 7.93 | 18.56 | 5.15 |
| Apr-15 | -1.19 | -6 | 15.23 | 9.57 | -4.26 |
| May-15 | 3.09 | 3.85 | 14.94 | 5.21 | -2.08 |
| Six Months | General Index | New Orders | Shipments | Number of Workers | Average Workweek |
| Sep-11 | 22.52 | 23.48 | 22.26 | 0 | -6.52 |
| Oct-11 | 14.63 | 19.77 | 23.69 | 6.74 | -2.25 |
| Nov-11 | 34.92 | 30.37 | 32.68 | 14.63 | 8.54 |
| Dec-11 | 47.29 | 45.32 | 41.27 | 24.42 | 22.09 |
| Jan-12 | 51.87 | 44.86 | 44.7 | 28.57 | 17.58 |
| Feb-12 | 45.13 | 36.76 | 40.64 | 29.41 | 18.82 |
| Mar-12 | 43.69 | 37.41 | 40.12 | 32.1 | 20.99 |
| Apr-12 | 40.45 | 38.12 | 38.18 | 27.71 | 10.84 |
| May-12 | 32.16 | 31.96 | 26.64 | 12.05 | 8.43 |
| Jun-12 | 27.38 | 27.87 | 22.38 | 16.49 | 2.06 |
| Jul-12 | 23.72 | 21.6 | 22.55 | 6.17 | -4.94 |
| Aug-12 | 19.26 | 13.72 | 22.16 | 3.53 | -8.24 |
| Sep-12 | 26.79 | 27.84 | 22.63 | 8.51 | 2.13 |
| Oct-12 | 20.45 | 22.91 | 18.62 | 0 | -11.83 |
| Nov-12 | 16.88 | 15.44 | 25.48 | -1.12 | 0 |
| Dec-12 | 21.88 | 21.56 | 23.6 | 10.75 | 5.38 |
| Jan-13 | 22.71 | 23.85 | 24.95 | 7.53 | 3.23 |
| Feb-13 | 30.18 | 25.88 | 26.77 | 15.15 | 11.11 |
| Mar-13 | 34.81 | 32.92 | 39.94 | 19.35 | 2.15 |
| Apr-13 | 30.41 | 35.35 | 36.47 | 25 | 7.95 |
| May-13 | 25.85 | 29.83 | 26.15 | 11.36 | 1.14 |
| Jun-13 | 27.55 | 21.89 | 20.71 | 1.61 | -9.68 |
| Jul-13 | 33.4 | 32.86 | 35.14 | 1.09 | -1.09 |
| Aug-13 | 36.26 | 29.58 | 31.54 | 8.43 | -6.02 |
| Sep-13 | 39.9 | 37.87 | 37.13 | 4.3 | -2.15 |
| Oct-13 | 41.54 | 37.86 | 34.08 | 7.23 | 2.41 |
| Nov-13 | 36.96 | 39.6 | 37.16 | 22.37 | -3.95 |
| Dec-13 | 39.77 | 30.57 | 33.15 | 9.64 | 1.2 |
| Jan-14 | 37.32 | 37.85 | 31.07 | 20.73 | 9.76 |
| Feb-14 | 38.17 | 43.16 | 42.43 | 25 | 7.5 |
| Mar-14 | 34.84 | 36.29 | 35.24 | 17.65 | 9.41 |
| Apr-14 | 38.43 | 34.08 | 38.3 | 22.45 | 1.02 |
| May-14 | 42.49 | 37.99 | 35.63 | 17.58 | -3.3 |
| Jun-14 | 41.06 | 43.81 | 44.05 | 20.43 | 0 |
| Jul-14 | 29.53 | 26.85 | 25.61 | 17.05 | -4.55 |
| Aug-14 | 46.1 | 48.9 | 54.67 | 22.73 | 0 |
| Sep-14 | 46.08 | 45.35 | 46.64 | 14.13 | 5.43 |
| Oct-14 | 42.39 | 43.24 | 43.07 | 12.5 | -2.27 |
| Nov-14 | 46.84 | 47.69 | 44.78 | 24.47 | 8.51 |
| Dec-14 | 39.31 | 38.85 | 37.75 | 20.83 | 12.5 |
| Jan-15 | 48.35 | 41.44 | 40.57 | 31.58 | 11.58 |
| Feb-15 | 25.58 | 28.61 | 30.34 | 24.72 | 1.12 |
| Mar-15 | 30.72 | 26.31 | 28.71 | 28.87 | 3.09 |
| Apr-15 | 37.06 | 33.57 | 32.38 | 22.34 | -1.06 |
| May-15 | 29.81 | 33.94 | 31.75 | 16.67 | -1.04 |
Source: Federal Reserve Bank of New York
http://www.ny.frb.org/survey/empire/empiresurvey_overview.html
Chart VA-1 of the Federal Reserve Bank of New York provides indexes of current and expected economic activity. There were multiple contractions in current activity after the global recession shown in shade. Current activity is weakening relative to strong recovery in the initial expansion in 2010 and 2011.
Chart VA-1, US, US, Federal Reserve Bank of New York, Diffusion Index of Current and Expected Activity, Seasonally Adjusted
Source: Federal Reserve Bank of New York
http://www.ny.frb.org/survey/empire/empiresurvey_overview.html
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015.
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