The White House announced yesterday that the United States is not in a recession now. Low unemployment numbers like those in today’s employment report show a strong economy — 261,000 jobs were added, tens of thousands more than expected. Expectations were high after Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) data showed demand for US workers rebounded in September. Today’s report largely affirms those optimistic expectations, but what seems simple is more complex. In short, the devil is in the details of the job report.
Nuance matters. With the pandemic upheaval lingering and the Fed intent on hurting workers to try to lower inflation, it’s vital to focus on blurry and sometimes ignored details. For me, that means probing how workers are feeling and keeping an eye on older workers.
So, what do I look for when I when I read through the jobs report?
Unemployment, Quitting, and Labor Sentiment
All media looks at the unemployment rate, 3.7 percent in today’s report, but I focus on worker flight risk — what share of the jobless quit or left their jobs. How workers are feeling about the economy can be inferred by whether they actually leave a job and leap into that scary space of unemployment. In September 2022, the job-leaver share of the unemployed was the highest in 30 years, 15.9 percent. In October, the job-leaver share of unemployed dropped to 14.6 percent.
To sharpen the focus on workers’ feelings, I pair job-leaver data with the quits rate reported in the JOLTS report. In September, the quits rate stayed steady at the rate it hit in July, 2.7 percent, which is high but falling. Paired with the rate in today’s report, this tells me fear is in the air.
Surveys about feelings also elicit information. Of late I look at the New York Federal Reserve’s Survey of Consumer Expectations (the SCE is somewhat misnamed because worker expectations are a large part of the survey). As I’ve previously reported, the most recent SCE tells a mixed story — expectations that you would lose your job rose in September.
The Sheer Scale of Older Workers Demand Attention
Over the last 20 years, older workers have made up the vast majority of the expansion in the labor force in the United States. While the number of workers ages 25–54 grew by 1.1 million, the number of older workers increased by more than 18.1 million. Looking forward, out of 7.7 million workers expected to be added to the economy by 2031, 3.8 million will be workers over 65.
There are 37 million workers over age 55, and their share of the labor force is growing faster than any other segment. This group’s sheer scale means that where the status of older workers goes, the status of all workers will follow. Attention must be paid.
So, I keep an eye on older workers. The unemployment rate for older workers (age 55 and over) for October 2022 is 2.5 percent, a blip up, but essentially the same as September’s remarkable low rate of 2.4 percent. These numbers represent a return to normal. Unlike during the pandemic, the unemployment rate for younger workers ages 25–54 is now higher than for older workers, which historically was the norm.
Are Older Workers Pushed Out in the Recession Coming Back?
People can be lured back into the labor force for many reasons — maybe wages are picking up, maybe they are more optimistic about their chances, maybe they need to make ends meet, as Social Security Works points out. The employment to population numbers — e-pop — tell us what everyone wants to know about this.
The employment to population ratio (E-POP) for workers ages 25 to 54 is about 80.3 percent and the ratio for older workers over 55 was 63.3 percent in August (latest avaliable from OECD. The E-Pop ratio for workers over 65 is steadily rising. This October the E-Pop is 16 percent, last year it was 15%.
During the pandemic, retirement rates increased drastically but contrary to public opinion, a substantial share of so-called retirements were not voluntary. We hope older workers pushed out before they were ready can find jobs. It is well known because of the Urban Institute’s Richard W. Johnson’s extensive research that older workers have a more difficult time finding work once unemployed than do younger workers. Allowing older workers to keep the same remote work flexibility they had during the pandemic would help.
The jobs report has a trove of information beyond the top line numbers. We mine it for data on trends and feelings about the future and what is happening to the large and fastest growing group of workers — those over 55.