For Decoding Labor Market, Unemployment Rate May Not Do the Job

  • 📰 WSJ
  • ⏱ Reading Time:
  • 69 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 31%
  • Publisher: 63%

United States News News

United States United States Latest News,United States United States Headlines

Some economists have concluded the official unemployment rate is increasingly inadequate to gauge the health of the job market

By David Harrison July 14, 2019 10:00 am ET The U.S. unemployment rate last month hit 3.7%—one of the lowest levels in half a century.

They’ve concluded the official unemployment rate is increasingly inadequate to gauge the health of the job market. For Fed officials, more slack means plenty of room to hold interest rates low or even cut them without worrying about inflation taking off. Changing population trends also make it hard to compare the unemployment rate across decades. For instance, the labor force is aging, and older people are less likely to be unemployed than younger people, which pushes down the unemployment rate. Likewise, more young people go to college now rather than directly into the workforce. That means they are less likely to be looking for work now than a generation ago.

Compared with the official rate, their measure suggests a less volatile labor market, one that didn’t contract quite as much during the recession and one that hasn’t improved quite as much since. “What you need to explain is why weak wage growth exists and a variable like unemployment is not going to explain [that],” Mr. Blanchflower said in an interview.Regis Barnichon, of the Federal Reserve Bank of San Francisco, and Geert Mesters, of the Barcelona Graduate School of Economics, recently developed a version of the unemployment rate that takes the aging of the population into account which, as of early 2017, indicated there was still room for the labor market to improve.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

LaborMarket

Duh

That's why they get the big bucks

Been known for years. Economists particularly at the federal level slow to change their metrics

So is inflation for monetary policy. Smokes and mirrors

lol

Oh

No sht.

and even now (after so many decades of total wage bust) only 'some' :)

Good new for realDonaldTrump = we must change the way we keep score!

Again? This was the same concern economists had in the late 60s and throughout the 70s. The reason for the panic now is that we’ve blown past the natural unemployment rate and things haven’t blown up.

That’s why economists look at multiple unemployment numbers as a start. Then, they analyze hundreds of other data points and try to put everything together. Still, there’s no definitive answer to anything. Economics is too hard for tiny brains.

Funny how the establishment will go to great lengths to try and destroy this President. Wonder what they will come up with during his next 4 year term.

Corrector wrong: The unemployment rate is a temporary measurement of people who are receiving Unemployment for 6 months & afterward they are discouraged workers if are still jobless & are not counted in unemployment. Or alternatively hiring temps to balloon up the labor force.

No, economists have submitted that Corporate Media fawns over Unemployment rate without Giving Equal Time & consideration to the Labor Participation Rate. The fault lies with the media, no one else! The media writes the articles, headlines, & news segments on TV. OwnIt

This is due to jobs not being adequate to support the American dream. No pensions No healthcare No vacations Employees provide Car Gas Cell Phone Office space Hours are 24 /7 Millionaires receive handouts Middle class pay higher taxes

Of course they are...

Moving the goalposts!

It's like something doesn't compute.

You sound like CNBC? What happened to your news team, all the good journalists quit?

So now that it’s so low under Trump, the metric needs to change?

Funny, they never thought that when Obama was president. :(

Some economists? You mean like left wing economists? They probably feel that because those numbers are setting records.

The rate is completely INACCURATE

Could have, in fact did say that 30 years ago. Back then $10.00 an hour was a minimal wage. No way 2 get ahead. No way 2 pay for emergencies. Seen a slip up on the “jobs” report. Few jobs pay $27.90 an hour which is what it takes 4 average median income. That most didn’t come

Well obviously not a good gauge when the orange fella is running things. Sheesh.

That’s what Trump said...when Obama was POTUS Nowadays? Wont STFU about the unemployment rate

No kidding. 🤓

Ok M is T... So why are T asking me for money?

Little to do with household income and long term benefits for working and middle class families.

'All the economic numbers are too good, so we need to find metrics to make Trump look bad!'

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 98. in US

United States United States Latest News, United States United States Headlines