William Polley on the Employment Report

Bill calls the latest news “good, not great”. Well said! He also notes that the unemployment rate rose a bit, which is interesting because the employment to population ratio (E/P) rose. Then again, the labor force participation rate (LFPR) rose even more. Speaking of which, Bill has some wise – if not kind – remarks:

The long run trends are for lower LFPR and E/P as the baby boomers retire. But that’s not what we’re seeing here. I raised the point then and repeat it now as a caution to not necessarily expect the “optimal” ratios today (and in years to come) to equal those of the late ’90s. However, the declines over the last year (like the increases in the previous year) are of a more high frequency nature. PGL is correct to raise the issue. The decline in these numbers since December is indicative of some potential problems below the surface that deserve more investigation.

Bill promises more thoughts on this later. Thanks Bill! We look forward to seeing your next post on this.