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Drop in labor force participation cut unemployment rate

Dion Rabouin, author of Markets
Expand chart
Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

The drop in the unemployment rate last month to 7.9% from 8.4% was more the result of people dropping out of the labor force — or giving up looking for work — than it was people finding jobs.

Details: The labor force participation rate decreased by 0.3 percentage point to 61.4% in September and has fallen 2 percentage points from its February levels to the lowest since March 1976.

To put that in perspective: The 2.5 percentage point drop in labor force participation from March to April was the largest in history and the rebound has only gone halfway and now reversed.

  • The employment-population ratio, at 56.6%, is 4.5 percentage points lower than in February.

Watch this space: Women have fared especially poorly in this recession. Women's labor force participation rate dropped to 55.6% in September, the lowest it has been since February 1987.

  • 865,000 women dropped out of the labor force, compared to 216,000 men.

Of note: BLS points out that last month about 4.5 million people were prevented from looking for work due to the pandemic and therefore not counted as unemployed, though this declined from 5.2 million in August.

  • "To be counted as unemployed, by definition, individuals must either be actively looking for work or on temporary layoff," the bureau says.

Go deeper

Bethany Allen-Ebrahimian, author of China
Jan 5, 2021 - World

The scope of forced labor in Xinjiang is bigger than we knew

Illustration: Eniola Odetunde/Axios

China has constructed a vast string of factories inside the walls of Xinjiang mass internment camps, and Chinese authorities are forcing thousands of Muslim minorities to work in cotton fields, according to two recent investigations.

Why it matters: Xinjiang products are deeply integrated into lucrative supply chains around the world. The Chinese Communist Party's official embrace of coerced labor will force Western governments and institutions to choose between pleasing business leaders or enforcing universal human rights values.

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Dion Rabouin, author of Markets
Jan 8, 2021 - Economy & Business

Labor market is moving in the wrong direction

Data: U.S. Department of Labor via FRED; Chart: Axios Visuals

More than 1 million Americans filed for unemployment benefits for the first time last week, even as new applications for the Pandemic Unemployment Assistance program fell to their lowest level since March.

State of play: The $900 billion stimulus bill passed by Congress at the end of December extended the PUA program through at least March but also added a new verification process that forces applicants to reapply in order to reduce fraud.

Go deeper (1 min. read)Arrow
Dion Rabouin, author of Markets
Jan 8, 2021 - Economy & Business

Red-hot housing market will face rising rates, falling confidence

Reproduced from Realtor.com; Table: Axios Visuals

U.S. 30-year fixed mortgage rates hit another record low this week, falling to 2.65%, data released Thursday by Freddie Mac showed, but Americans are starting to worry that the goldilocks environment for home sales could be coming to an end.

What's happening: The decline in mortgage rates to the lowest in the 50-year history of the data has helped keep costs down for prospective buyers even as overall prices have skyrocketed thanks to a flood of demand and declining supply.

Go deeper (1 min. read)Arrow