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Interesting Trends In EPOP

Since the COVID crisis began, traditional methods of measuring unemployment aren't terribly useful, since so many have left the workforce. Until that slack gets taken up, both Labor Force Participation and perhaps better still, the Employment to Population Ratio may provide a better understanding of the labor economy. One of the trends that has long puzzled me is the steep drop in the age 16-19 cohort for both metrics that began around 2000, shown here.

I'm not sure what caused this drop, but factors could be record graduation rates from high school, and perhaps enlistment in the armed forces after 9/11. However, the trend kept dropping through the "aughts" and never really got off its back since then, save some retracement in LFPR from yet another swoon caused by the 2009 financial crisis.

However, with our new crisis, there appears to be a recovery in the cohort. (Green line. January 2020 to June 2021)

Pre Covid Current

EPOP 61.1% 58.0%

25-54 80.5% 77.2%

16-19 31.5% 31.9%

While the EPOP ratios have yet to recover generally or for Prime Age, the kids seem to be getting back in the race a lot sooner. The May 2021 count is even a touch higher, at 33.2% before taking a June dip.

So it might be interesting to see how this plays out. As most people who follow the labor markets know, COVID has caused a massive convulsion in the employment matrix. "Churn" doesn't even BEGIN to describe it. Another factor to keep an eye on? Check out the lack of recovery in the 65+ cohort. That's a drop of 24.2% to 21.9%, but unlike the other cohorts, the upward trend seems to have stalled, and then faded since November 2020.

Before COVID, this was the fastest growing sector of the workforce. COVID might have forced millions of older workers, who feared for their health when the crisis was spinning out of control, out of the workforce for good. (Chart shows January 2020 to June 2021.)

The implications of all this are yet to be seen, but it's certainly worth keeping an eye on.


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