In the week ending last Friday, the advance figure for seasonally adjusted initial unemployment claims increased to 379,000, according to the U.S. Department of Labor release today. Washington had an increase of 4,383 due to layoffs in agriculture, construction, manufacturing and retail trade industries.
The four week moving average came in at 343,500, an increase of 13,250 over the previous week. Because December is generally a time of increased employment, the actual initial claims went down by nearly 50,000 jobs over the previous week, but due to the adjustment for seasonal jobs, the net effect was an increase in initial claims.
Additionally, in the Monthly Labor Review from the Department of Labor, also released today, projections call for a continued decrease in the labor force through 2022.
Because of the decreasing labor force participation rate of youths and the prime age group, the overall labor force participation rate is expected to decline. The participation rates of older workers are projected to increase, but remain significantly lower than those of the prime age group. A combination of a slower growth of the civilian noninstitutional population and falling participation rates will lower labor force growth to a projected 0.5 percent annually.
The civilian labor force, those working or looking for work, has changed substantially in both size and demographics over the the last half of the 20th century. The labor force grew vigorously as women entered the labor force in the 70s and 80s. Also, the baby boom generation jumped into the workforce with both feet.
The labor force participation rate of women, which peaked in 1999, has been on a declining trend. In addition, instead of entering the labor force, baby boomers are retiring in large numbers and exiting the workforce. Once again, the baby-boom generation has become a generator of change, this time in its retirement. Add to that the jobless recovery of the 2001 recession and then the severe economic impact of the 2007-2009 recession and major changes have taken place in the workforce.
More and more baby boomers have and are retiring, although many stayed with their jobs past their expected retirement due to loss of retirement nest eggs. Even they will soon join the retired community and the projected workforce will continue to be a lower percentage of the population. Of the labor force in 222, over 25 percent are expected to be 55 and older.
In 1992, there were 12,167 workers over 75 in the workforce, by 2022, that is estimated to be 24,402, more than double. The numbers are similar for other strata of those over 55.
Unemployment and workforce are linked when those seeking a job and get discouraged, drop out of the workforce. They then also drop from the unemployed. For the week ending Dec. 7, the states (and territory) with the highest unemployment rate were Alaska, Puerto Rico, New Jersey, California, Connecticut, Pennsylvania, West Virginia, Wisconsin, Montana and Oregon.
The largest increase in initial claims for that week came from California, New York, Pennsylvania, Georgia, and Texas.
While negative, the unemployment news does not reach the grim news from a few years ago.
About the author: Fred Chamberlin was a senior loan officer with Guild Mortgage Company in Oak Harbor. He was in the mortgage origination business for over 20 years and in the lending business for over 30 and authors a number of mortgage related blogs.