Watching the Employment-to-Population Ratio
Dean Baker watches the employment-to-population ratio:
Beat the Press | The American Prospect: [N]ews reporting on yesterday's job data seems to have largely missed the story on sagging employment rates.... This is not a demographic story. The declining employment rate [EPOP] is being driven by prime age workers. The employment rate for workers ages 25 to 54, has fallen from 80.3 percent in January to 80.0 percent in June... down 1.8 percentage points from its peak of 80.8 in February of 2000. By comparison, it is only 1.3 pp above its trough of 78.7 percent in March of 2004.
This drop is being driven primarily by workers ages 35-44. Their EPOP has fallen from 81.5 percent in January to 80.6 percent in June. This is 2.1 pp below the peak of 82.7 percent in Jan-Feb of 2000 and 1.2 pp above the trough of 79.4 percent in July of 2003. It is very difficult to think of any reason why hundreds of thousands of prime age workers (both men and women, the declines are roughly equal) would suddenly drop out of the labor market, other than limited job opportunities... EPOPS is not consistent with a strong labor market.
