Demographically Sobering Thoughts on US Employment in the Next Five Years - Mish Talk

Civilian Noninstitutional Population from BLS, projections by the CBO, chart by Mish

Civilian Noninstitutional Population (CNIP) Definition

Persons 16 years of age and older residing in the 50 states and the District of Columbia, who will not be inmates of establishments (e.g., penal and psychological amenities, properties for the aged), and who will not be on energetic obligation in the Armed Forces.

CNIP Chart Notes

Actual numbers from the BLS for years 2000 by 2022
December all years
Total is the sum of components which induces small however irrelevant rounding errors

CNIP Projection Detail 2021-2030

Civilian Noninstitutional Population from BLS, projections by the CBO, chart by Mish

CNIP 2023 Projected Change From 2022

Total: +2 Million
Core 25-54 Age Group: +1 Million
55-64 Age Group: No Change
Age 65+: +2 Million

Employment Level 2000-2030 December All Years as of 2022

Employment ranges from the BLS by 2022, 2023-2030 Mish projections

Employment Level Chart Notes

I made projections by taking the proportion of individuals working in every age group in December 2022 and assumed that proportion could be comparatively steady going ahead.
Example: In 2022, for age group 25-54, there have been 101.8 million individuals employed. The proportion of individuals employed in age group 25-54 was 101.8 (Employed) / 127.32 (CNIP) = 80.0 p.c. For projections, I assumed that quantity will maintain for all subsequent years.
These percentages seemingly won’t maintain if there’s an employment decline attributable to recession.

Employment Level and Projections 2021-2030

Employment ranges from the BLS by 2022, 2023-2030 Mish projections

Employment Level and Projections Assumptions

No decline in employment attributable to recession
The BLS employment ranges as of December 2022 are correct
The BLS CNIP projections are correct
The proportion of individuals working will probably be comparatively fixed

Based on these assumptions, I mission a mere rise in whole employment for the 12 months of about 300,000.

Looking additional forward the whole employment acquire from 2022 to 2030 is a mere 4.1 million in 8 years.

Does this make any sense? Yes, it does. Let’s begin with a take a look at participation charges.

Labor Force Participation Rates, December All Years 2022

Labor drive participation charges 2000-2022 from BLS

Participation Rate Chart Notes

The Labor Force Participation Rate is the calculated as the labor drive divided by the working-age inhabitants.
The Labor drive is the variety of individuals working or actively in search of work. Unemployed individuals are in the labor drive.
Participation charges have usually been declining aside from age group 60-64 and 65+ (the latter declining since 2019).
In December 2019, the LFPR was 82.9% and is 82.4% as of December 2022.

Note that in my instance above, I used an employment ratio of 80.0 p.c.

The unemployment price for age group 25-54 in December of 2022 was 2.9%. Subtracting 2.9 from 82.4 yields 79.5 practically spot on to the barely increased quantity that I used.

To perceive why employment is so stagnant, let’s hone in on the demographic purpose.

Civilian Noninstitutional Population 2000-2030 Detail

Civilian Noninstitutional Population from BLS, projections by the CBO, chart by Mish

Civilian Noninstitutional Population Detail Notes

The variety of individuals age 65+ is rising quickly
The variety of individuals age 55-64 is in decline

The above chart totally explains my stagnant employment projections.

Scroll to Continue

Key Participation Rates

Age 55-59: 72.7
Age 60-64: 58.5
Age 65+: 19.3

People are quickly shifting from excessive participation charges to a lot decrease ones.

For 2023, the CBO estimates a 2023 improve in the age 65+ inhabitants of two million and that 2 million accounts for the whole rise in inhabitants.

Final Thoughts

There is a giant distinction between participation charges of 55-59 (72.7) and 60-64 (58.5). Unfortunately the CBO didn’t present that breakdown.

Similarly, there’s a large distinction between participation charges of 16-19 (37.0) and 20-24 (71.3). Again the CBO didn’t present that breakdown.

My employment projections by 2030 usually tend to be off in one route or one other attributable to these lacking numbers than any of the different assumptions.

Again, the baseline assumption isn’t any employment losses attributable to a recession!

Finally, by 2030, the CBO initiatives the 16+ inhabitants will develop by 14 million whereas I mission employment primarily based off demographic developments will solely rise by 4.1 million.

Importantly, of the 14 million inhabitants improve, 13 million of it is going to be in age group 65+.

Think about that for a second together with strains on Medicare and Social Security.

Understanding the Current Discrepancy Between Jobs and Employment

Payroll and employment information from the BLS, chart by Mish

Payrolls vs Employment Since March 2022

Nonfarm Payrolls: +2,887,000
Employment Level: +916,000
Full Time Employment: -288,000

Full time employment is down 288,000 since March and down by 444,000 since May!

For dialogue, please see December Jobs: Employment Rises by 717,000 All of Them Part Time

Also observe that The BLS Reports Employment in the Second Quarter Fell By 287 Thousand

In addition the common variety of hours labored is declining.

Average Work Week Has Peaked

Data from BLS, chart by Mish

For dialogue, please see Average Work Week Has Peaked and Total Aggregate Hours Is Rolling Over

Demographically Sobering Thoughts on US Employment in the Next Five Years – Mish Talk

Angela Mundorff

Angela Mundorff

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