There have been many ways to measure the impacts of Covid on the US economy. We talk a lot about spending, supply chains, and inflation. But little has been said about employment. Employment is the basis of our economy and our feelings of wellbeing. So I decided to take a look at employment at the national level.
The Bureau of Labor Statistics publishes a lot of information on employment, I chose something they call total nonfarm employment. No offense to agricultural workers, but this measure seems to be the one most often cited. It comes out each month and tells you the number of people who are employed. The information comes from the business firms.
I downloaded data from January of 2011 to November of 2021. In January of 2011 there were 131 million people employed in the US. By November of this year the number reached about 149 million. That's an increase of 18 million workers -- or about 14%. That amounts to increase of almost 2 million workers per year. Not bad.
If you measure change from December to December of each year, it was typical for employment to grow by about 1.6%. In 2019 the growth was 1.3%. The highest growth rate before 2021 was 2.2%. Not a very exciting variable. We can count on employment to grow. Even the monthly growth rates are not very interesting. In the 8 years from 2011 to 2018 the lowest growth rate in one month was 0.3% -- this happened twice. The highest rate was 3.1%. That also happened twice.
Snooze.
But then we hit 2020. In March, employment fell by 1.7 million jobs and then in April the decline was almost 20 million jobs. In one month there were 20 million less people employed. Employment was at 130 million jobs on March of 2020. That's close to the employment level of 9 years before! Now that's news.
By the end of 2020, employment crept back to 143 million and by the end of 2021 it was closing in on 149 million. That sounds pretty good. But at 149 million it was still 3 million below the peak rate of 152 million in December of 2019. 3 million is a lot of jobs lost.
Clearly 2020 was a bad year for work. But notice that 2021 showed a lot of vigor. The increase in employment in the first half of 2020 was about 6% per month. The second half of 2021 has been good too but not as spectacular as the first six months.
This numbers make me dizzy. But there is a story here. If we want to focus on employment, we see the very temporary effects that Covid has had on jobs. We are not yet back to previous peaks. But we aren't far off.
That sounds pretty hopeful, but it doesn't hurt to think about where we might have been without Covid's interruptions. If employment had grown in 2020 and 2021 at previous rates -- say about 2 million jobs per year -- then the employment level at the end of 2021 might have been around 156 million. Todays' 149 million workers means we are off that mark by 7 million workers. 7 million workers as a percent of 156 million is about 5%.
That sounds hopeful to me. But a lot depends on Delta, Omicron, and whatever comes next.
There is employment that is who are fgettingb unemployment. Those who quit ther job are not. Do they count? Do the massive retiring boomers count? Do higher prices affect higher pay? AI is replacing many jobs…. Where did they go. A part of migration picked low level jobs, do they count.
ReplyDeleteCount how? No idea what you are saying. I made the point that employment has increased. What are you trying to say?
DeleteTyping on my cellphone without glasses is terrible...sorry.
ReplyDeleteThe point is that the numbers do not make math sense in terms of the types of labor forces including robots. Signs remain for help wanted but specific types of unemployed or quit their job who are not either willing to apply or gone on to higher things. The baby boomers are all retired but many work part time as advisors or trainers. The existing workers got a raise via Congress to $15 an hour in the lower payroll states like most of the southeast. But in doing that prices went up for most things which means no change ...at least where I live. Lots of new technology and lots of changes coming such as the electric car and the multi level of services that will support it. There are many others like this...then there is the next virus is doing quite well here in Florida. I am not a pessimist and hope all will work out...I am retired.
But fear of inflation and unemployment levels is based on static models.
I still have no idea what you are saying. Is there a main point or conclusion or do you just want to list a bunch of things happening? Fear is based on static models? Numbers don't make math sense? Why? How? New technology? So what? What does that impact? Prices going up means no change? What does that mean? Sorry Hoot. But I just don't get what you are trying to say.
DeleteDefinitely lots of boring numbers, but you present them in an interesting and compelling way. It's why I avoid macroeconomic topics.
ReplyDeleteIn order to avoid the misinterpretation of unemployment rate (which is at 3.9% compared with 3.5% in Feb 2020), I found a measure at BLS: employment-population ratio; those who are working divided by those who could work. Feb 2020 it was 61.1%, and in Dec 2021 it is 59.5%. The difference is about 5 million MORE people are not employed. Maybe they all went to grad school?
Thanks Robert! I am glad to see that the two numbers are pretty much saying the same thing. The labor market is healing...though not quite there yet. I guess it will take a little while longer to heal from the effects of Covid on the economy.
Delete