Employment Population Ratio- Good News

April 18, 2017

The BLS’s Employment Population Ratio was 60.1 in March 2017, its first time back over 60% since February 2009.

February 2009!

This indicator actually shows what it purports to, unlike the U-3 (headline) Unemployment rate.

Not since February 2009…

The U-3 Unemployment rate may actually fall if workers give up looking for work, as the labor market falters. As the labor market is recovering,  the U-3 unemployment rate can rise because more people are re- entering the labor force as they start to look for work again.

The Employment-Population ratio, because it is unaffected by voluntary changes in labor force participation, is a useful indicator of current labor market conditions. Lows in the employment-to- population ratio correspond with economic downturns. The employment-to-population ratio holds clear and discernible implications for the labor market, both among and between segments of the population.

The Employment-Population ratio is a useful indicator. And currently, a positive one.

BLS Employment Population Ratio