Jobless Rate in U.S. Falls Below 6% as Hiring Picks Up | Hacker News Reader

Jobless Rate in U.S. Falls Below 6% as Hiring Picks Up

nytimes.com

39 pointsdenzil_correa47 comments

But the workforce participation rate also fell.

"Notably, part of the decline in the unemployment rate was because workers left the labor force. The share of the population with jobs or hunting for one fell to 62.7 percent, its lowest level since 1978."

http://www.nbcnews.com/business/economy/unemployment-rate-dr...

Another article I read earlier today also said that the average wage fell by 1 cent.

Im glad someone actually points this out. This is the real news.

How much of this is caused by the aging population? It would be interesting to see the labor force rate between 20 and 65.

http://2.bp.blogspot.com/-kVyZDV_5XZA/Uz6n7yb5lNI/AAAAAAAAej...

From a blog post on http://www.calculatedriskblog.com a few months ago, highly recommend the blog.

One is left to wonder how much a burgeoning economy matters when the middle class is poorer than it was 25 years ago. (http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/01/t...)

Why should I care if the pie is getting bigger if I'm getting smaller peice at the end of the day?

Give me a smaller pie and a bigger peice of said pie anyday.

The jobless rate is an indicator of difference between demand and supply for employees. With people out of work, of course salaries will shrink.

That will change when the jobless rate returns to normal.

A very poor indicator, given that it doesn't count workers who have given up looking for a job because none were available.

If they gave up, they aren't really in competition.

This criticism of unemployment statistics is parroted whenever an unemployment discussion is had. But those discouraged worker numbers are tracked too. They tend to go together, and the recent news about hiring increases is not due to a massive increase in discouraged workers.

Sometimes there really is a net increase in employment.

Some research suggests that happiness vis a vis personal wealth is determined by how much you have relative to your friends.

That actually makes a lot of sense. I'll have to look at some studies.

If you google my comment[1] you will find it[2-5].

[1] https://www.google.com/search?q=research+suggests+that+happi... [2] http://www.usc.edu/dept/pubrel/trojan_family/winter07/happin... [3] http://vanneman.umd.edu/socy699J/GrahamP02.pdf [4] http://isites.harvard.edu/fs/docs/icb.topic620591.files/Indi... [5] Relative Income Hypothesis. I will leave the googling of this as an exercise for the reader.

Thanks!

That's why even the rich get more annoyed when inequality rises. They see those making more than them pulling away. The knee jerk reactions to this tend to make the problem even worse (eg. lower taxes, justified by reducing social security).

In reality this is a problem. When everyone around you is making more, things tend to cost more - e.g. real-estate in silicon valley is atrociously expensive for what you get, so you need a solid dual income or high-earner single income to afford a house - as the aggregate of these go up, your ability to afford a house or an upgrade diminishes.

So much of middle class net worth is tied to the value of real estate, the conversation is really about the trend in home prices, and whether one bought at the peak of the market.

The graph from that article http://img.washingtonpost.com/blogs/wonkblog/files/2014/10/M... suggests median net worth was doing quite well up until 2007-2008.

What fraction of that is due to demographics? Discouraged workers are bad news, but old people retiring isn't bad news.

There's a chart on page 10:

Identifying Factors behind the Decline in the U.S. Labor Force Participation Rate

http://macrothink.org/journal/index.php/ber/article/download...

As a brief summary, as of 2012 the decline in labor force participation rate was about 1/3 due to demographic shifts and 2/3 due to the business cycle. The paper notes it was expected to fall even further, however individual "behavior changes" caused it to not fall as far.

Most of it was due to "business cycle"?

What does that mean?

The recession triggered changes in organiztion structure accross a wide variety of areas. This led to re-negotiation or termination of previously existing employment contracts. When there is a market failure to re-negotiate such contracts on mutualy agreeable terms, the parties are no longer in an employee/employer relationship. The parties are not in the workforce. Whether they are declared "unemployed" or not is a bit of a shambolic side debate about window dressing.

When you don't include short-term discouraged workers, it's easier to get better headline numbers even if the overall trend is about the same. Adding an estimate for long-term discouraged workers, it's not quite as clear that unemployment is reducing: http://www.shadowstats.com/alternate_data/unemployment-chart...

While I try to take all government-produced estimates with a grain of salt, I and many others consider ShadowStats's mysterious estimates much less reliable, due to a fairly obvious anti-government agenda and the simple infamous fact that they insist inflation is severely underreported despite not raising their subscription price in over 8 years!

You'd have to gather some data before bucketing them under "discouraged".

One side effect of Affordable Care Act is that it's possible for a 40-year-old corporate employee with savings, family and children, to leave their current job, work on new business and buy an affordable health insurance plan.

Previously lack (or low quality) of individual health plans would discourage anybody from leaving their corporate job, even if they accumulated enough savings to do it.

I don't buy it. For myself and other employers I know, we're just having an incredibly difficult time hiring low skilled employees. $15 an hour for menial work? Maybe 4-5 responses from craigslist. Contrast this with a couple years ago when there would have been dozens of applicants. Labor seems tight.

That's just anecdotal evidence, what you're experiencing might just be local to your town or the type of work you're offering.

Where?

Speculation: someplace where $15/hr isn't enough to live even a commuter lifestyle.

I don't know what kind of menial positions you're hiring for but I have definitely seen companies with implicit hiring policies that would make it difficult to hire many of the people who are actually in need of menial work for employment. e.g. want menial work? Well you should still at least sort of remind me of the upper middle class/Ivy league types I am hiring for my salaried positions. Even in our current context of an industry dominated by affluent white males I think what I describe above is where race and class discrimination are worst for job seekers.

Hey, I'm an iOS developer desperately seeking work. I am also a vet, and I've had no luck finding work. Where can I go to get this work? I'll even do menial work.

Location?

Austin, TX

http://randydillon.net

I know someone looking for an iOS dev, I'll pass that along. Can't really promise anything but maybe something will come from it.

Thanks. My email is randydillonnet AT gmail DOT com and my github is https://github.com/NSausage

Your observation appears to be consistent with a declining rate of people who want a job but don't have one.

For those interested in details about participation rates, demographics, etc, you can start diving in with Calculated Risk's info and analysis here:

http://www.calculatedriskblog.com/2014/10/september-employme...

http://www.calculatedriskblog.com/2014/10/comments-on-employ...

To the people dissatisfied with the headline unemployment rate, we can also look at the U5 unemployment rate, which includes discouraged workers. It tells roughly the same story as the headline rate, U6 which includes part-for-economic-reasons workers seems to be falling a bit faster than the headline rate:

http://www.macrotrends.net/1377/u6-unemployment-rate

The mandate of the fed should be changed to correct for the data problems evident here.

The "easiest" way to increase (inverse) metrics is always to move people from the measured bucket (unemployed) to the not-measured one (non-participating).

If we shift inflation from assets < 1 year life to those of longer duration, we can manipulate that metric pretty well too.

Until composite metrics are better disseminated and understood, these things will remain underlying problems.

Reposting dead reply from BobCat:

> The statistic that should be used is full time job equivalents over the preceding year - any other statistic can be misused, but actual hours worked is pretty reliably determined and increases and decreases have real meaning.

Others here have touched on some of the issues with the headline number, such as quality of jobs created, full-time employment rate, the real unemployment number (counting discouraged), and the labor force participation rate.

Another aspect to the current situation that really bothers me, is that we're only starting to claw down the real unemployment rate after five years, approximately just in time for the next recession to hit. GDP growth has basically been falling for three years now. Getting slammed with another recession, with 11% real unemployment, is going to hurt a lot.

I've been tracking the U6 unemployment rate which is much more pessimistic and it is also tracking down steadily. http://portalseven.com/employment/unemployment_rate_u6.jsp

U6 is quite optimistic, actually. http://i.imgur.com/x1duiaG.gif

shadowstats is junk science. https://news.ycombinator.com/item?id=8235378

Interesting but who generates the other two graphs and what is their source of data?

Predictable "good news" on unemployment with elections looming.

Thanks for all the free money!

cant wait for the inflation to pick up -.-

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