The official unemployment rate of 5.1% suggests a jobs market that is more or less healed:
The employment population ratio, the number of employed as a share of the working-age population, still looks deeply depressed:
So which measure better reflects the true state of the labor market? Well, one way to gauge is by looking at a third measure. A new Atlanta Fed blog post highlights the “utilization-to-population” ratio, or ZPOP. (Yes, there is a K-pop joke in there somewhere.
The ZPOP ratio is the share of the working-age population that is “working full time, is voluntarily working part-time, or doesn’t want to work any hours.” It is a way of answering the question, “Are your labor services being fully utilized?” The Atlanta Fed:
According to this measure, about 91 percent of the working-age population is considered fully utilized. The remaining 9 percent are “underutilized” and are a roughly even mixture of the unemployed, those not in the labor force but wanting to work, and those working part-time but wanting full-time hours. The headline U-3 unemployment rate is very close to its prerecession level but is thought to overstate the health of the labor market. At the same time, we think that the EPOP ratio overstates the amount of remaining labor market slack. The ZPOP ratio is in the middle; approaching its prerecession level but still with some way to go.
So maybe that isn’t a bad way of looking at the labor market, ” … approaching its prerecession level but still with some way to go.”
from AEI » Latest Content http://ift.tt/1OuDQ3E
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