Understanding the U.S. Labor Market – A September 2022 Snapshot

According to the Federal Reserve Economic Data (FRED) website, April 2020 recorded the highest unemployment rate during the COVID-19 pandemic at 14.8%. As of September 2022, the unemployment rate reduced to 3.5%; returning to the pre-pandemic level of 3.5% as reported for January and February of 2020 at the FRED site.

The Bureau of Labor Statistics (BLS) September 2022 news release indicated nonfarm payrolls increased to 263,000 for the month, while the labor-force participation rate, which measures the percentage of working-age adults who are working or looking for work, dipped to 62.3 percent in September from 62.4 percent in August. Both indicators show a strong labor market that is may be starting to cool down. There were notable job gains in the leisure, hospitality, and health care sectors.

Discussion Questions:

1. Find the unemployment rate for the highlighted months from the FRED site and complete the table.

2. Look for trends/patterns: The unemployment rate in September 2022 is 3.5%. What are your thoughts about the current state of the economy in terms of unemployment based on the FRED data for the highlighted months in the table relative to September 2022?

3. Explain which type of unemployment (cyclical or natural unemployment) is currently happening in these past three months (i.e., July, August, September 2022)? Was the unemployment type the same when the pandemic peaked in April 2020?
   
4. Read the first four pages of the Bureau of Labor Statistics September 2022 News Release and extract the data for the following indicators of unemployment:
   • Number of permanent job losers vs. number of persons on temporary layoffs
   • Not in the labor force who currently want a job
   • Part-time for economic reasons
   • Marginally attached to the labor force
   • Discouraged workers

5. Self-reflection: Give two personal takeaways from reading, understanding, and using data from the FRED and BLS sites. List two ways that you plan to use the data.

Sources| FRED Economic Data: Unemployment rate; US Bureau of Labor Statistics: Economic News Release – The Employment Situation, September 2022; The Balance:  What is the Labor Force Participation Rate Formula?; FED of St. Louis: Labor Market – The Economic Lowdown Video Series; FED of St. Louis: Unemployment – The Economic Lowdown Video Series; Unsplash: Picture of people walking