Helping Understand Labor Markets
My colleague Mark Carter wrote about the latest state employment reports in a SouthPoint post last week. Near the end of his post, Mark mentioned the Atlanta Fed’s new state-by-state feature in our Jobs Calculator. I wanted to expand on his discussion of this new, interactive tool. The Jobs Calculator allows the user to calculate the net employment change needed to achieve a target unemployment rate after a specified number of months. You can adjust the target unemployment rate, the number of months, and the assumed labor force growth.
Julie Hotchkiss, a research economist and policy adviser in the Atlanta Fed's research department, created the Jobs Calculator and is responsible for this new regional feature. She wrote about it in detail in a recent macroblog post titled “Atlanta Fed's Jobs Calculator Drills Down to the States.”
Speaking of drilling down to the states, our Data Digests feature the latest state-level data for a number of regional labor market indicators. The monthly report, published by the Regional Economic Information Network (REIN), also contains state-level data and analysis on real estate, manufacturing activity, and other key indicators.
I want to mention one other tool on our website in the context of a recent speech by Atlanta Fed President Dennis Lockhart. Last month in Montgomery, Alabama, he spoke about labor markets and the importance that identifying real, sustained improvement has on monetary policy:
Employment is growing at a pretty steady, if unspectacular, pace. Monthly job gains over the last six months have averaged 174,000. It's fair to say employment conditions are improving. The official rate of unemployment calculated by the Bureau of Labor Statistics was 7.3 percent in October, down from 7.9 percent a year ago. Over the last year, the economy has created 2.3 million payroll jobs on net.
This is a good story, and an important story. When the current asset purchase program was announced in September 2012, private forecasters expected that the unemployment rate at the end of this year would be about 1/2 percentage point higher than it is today. In that sense, there has been substantial improvement in labor markets over the past year.
On the other hand, several measures of labor market health are less satisfactory. Long-term unemployment is at historically high levels. And the number of people working part time while looking for full-time work remains elevated. There are about 4 million more people unemployed today than before the recession. And there are significant numbers of discouraged workers who are not counted in the labor force who would return if conditions were more encouraging.
For this broader look at the national labor market, check out the Atlanta Fed’s labor market spider chart. This tool is designed to allow real-time tracking or monitoring of broad labor market developments by comparing current conditions to those in the fourth quarters of 2007 (the prerecession peak) and 2009 (the postrecession trough in employment). Indicators of labor market status are broken up into four groups: employer behavior, confidence, utilization, and leading indicators.
Whether it’s regional or national data, keeping up with labor market developments is central to understanding the general health of the economy. The features noted above are designed to help the Atlanta Fed and you do just that.
By Mike Chriszt, a vice president in the Atlanta Fed's public affairs department
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