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Glass Half Full or Glass Half Empty?

Last Friday, the Bureau of Labor Statistics released the monthly employment situation report, known by many simply as the jobs report. The numbers showed a substantial decline in the nation’s unemployment rate to 8.6%, down from 9.8% a year ago and down from 9% in October.

Because of how the unemployment rate is calculated, shifts like this are the result of a variety of factors. The drop in unemployment we saw in November was due to two equally important factors: people finding jobs and people stopping their job search. About half of this drop was due to people finding jobs. Those gaining jobs were largely adult men. This is not surprising given that the sectors growing at the fastest pace are precisely sectors that mostly hire men, including professional and business services, manufacturing, and retail trade.

 

The other half was due to some workers stopping their job search and leaving the labor market. The bulk of those leaving the labor force were adult women and, disproportionately, African American women and less educated women. By contrast, more men actually started to look for jobs again.

Labor Force Participation Rate for Men and Women Aged 20+, Seasonally Adjusted

Labor Force Participation Rate for Women Aged 20+, Seasonally Adjusted

Labor Force Participation Rate by Education Level, Seasonally Adjusted

It is not surprising to see men entering the labor market and women leaving. Women have been strongly and adversely affected by the large layoffs in state and local government that we’ve seen during the past year. Of the women who were not in the labor force the vast majority reported they didn’t want a job.  Moreover, among the ones who said they wanted a job in November, only a third cited discouragement over their job prospects as keeping them from searching for a job.  The majority cited personal reasons such as school and family responsibilities. 

Reasons for Not Being in the Labor Force, Among Women in November, Not Seasonally Adjusted

Reasons for Not Being in the Labor Force, Among Women Who Wanted a Job and Were Available to Work in November, Not Seasonally Adjusted

The women who are out of the labor force due to schooling may just be the silver lining for women right now. When they re-enter the labor force they’ll come back with more skills and be better prepared to enter growing sectors.

In a nutshell, half of the large drop in the unemployment rate we saw last month was due to men finding jobs and half due to women leaving the labor force. Job creation across most sectors is increasingly helping men find jobs and bringing them back into the labor force. Women, however have been hurt by continued layoffs in the public sector. Shrinking government doesn’t help the labor market.

Whether you see this report as a glass half full or a glass half empty depends on where you stand. However, the general outlook is good for most workers, and particularly for those in the private sector.

Adriana Kugler is Chief Economist at U.S. Department of Labor.

© Copyright 2020 U.S. Department of LaborNational Law Review, Volume I, Number 342

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About this Author

The Department of Labor (DOL) fosters and promotes the welfare of the job seekers, wage earners, and retirees of the United States by improving their working conditions, advancing their opportunities for profitable employment, protecting their retirement and health care benefits, helping employers find workers, strengthening free collective bargaining, and tracking changes in employment, prices, and other national economic measurements. In carrying out this mission, the Department administers a variety of Federal labor laws including those that guarantee workers’ rights to safe and...

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