Question

Unemployment, employment and the labor force participation rate have been in the news lately. Analyze these three statistics since 2000. What are the trends? Explain. What does each statistic tell you that the other statistics do not tell you? Unemployment has multiple measures – which one is best and why? Make sure you use at least one graph in your answer. Answer with explanation and detail.

Answer 1

Answer :-

From April to July 2017, the number of employed youth 16 to 24 years old increased 
by 1.9 million to 20.9 million, the U.S. Bureau of Labor Statistics reported today. 
This year, 54.8 percent of young people were employed in July, up by 1.6 percentage 
points from a year earlier. (The month of July typically is the summertime peak in 
youth employment.) The unemployment rate for youth was 9.6 percent in July, down by 
1.9 percentage points from July 2016. (Because this analysis focuses on the seasonal 
changes in youth employment and unemployment that occur each spring and summer, the 
data are not seasonally adjusted.)

Labor Force

The youth labor force--16- to 24-year-olds working or actively looking for work--grows 
sharply between April and July each year. During these months, large numbers of high 
school and college students search for or take summer jobs, and many graduates enter 
the labor market to look for or begin permanent employment. This summer, the youth 
labor force grew by 2.4 million, or 11.6 percent, to a total of 23.1 million in July. 

The labor force participation rate for all youth was 60.6 percent in July, little 
different from a year earlier. (The labor force participation rate is the proportion 
of the civilian noninstitutional population that is working or looking and available 
for work.) The summer labor force participation rate of youth has held 
fairly steady since July 2010, after trending downward for the prior two decades. The 
summer youth labor force participation rate peaked at 77.5 percent in July 1989.

The July 2017 labor force participation rate for 16- to 24-year-old men, at 62.3 
percent, continued to be higher than the rate for young women, at 58.8 percent. The 
rate for young women edged up from last July, while the rate for young men was 
essentially unchanged. Whites had the highest youth labor force participation rate in 
July 2017 at 62.1 percent. The rate was 55.9 percent for Blacks, 47.4 percent for 
Asians, and 56.6 percent for Hispanics. The rate for Asians increased by 4.3 percentage 
points from last July, while the rates for Whites, Blacks, and Hispanics showed little 
change.

Employment

In July 2017, there were 20.9 million employed 16- to 24-year-olds, slightly higher 
than the summer before. Between April and July 2017, the number of employed youth rose 
by 1.9 million, in line with the change between April and July 2016. The employment-
population ratio for youth--the proportion of the 16- to 24-year-old civilian 
noninstitutional population with a job--was 54.8 percent in July 2017, an increase of 
1.6 percentage points from the prior year.

The July 2017 employment-population ratios for young women (53.4 percent), Blacks 
(46.9 percent), and Asians (42.7 percent) increased over the year. The ratio for young 
men edged up to 56.1 percent. The ratios for young Whites (57.2 percent) and Hispanics 
(50.9 percent) were little different from the summer before.

In July 2017, the largest percentage of employed youth worked in the leisure and 
hospitality industry (26 percent), which includes food services. An additional 19 
percent of employed youth worked in the retail trade industry, and 12 percent worked 
in education and health services.

Unemployment

Unemployment among youth rose by 458,000 from April to July 2017, compared with an 
increase of 611,000 for the same period in 2016. 

In July 2017, the youth unemployment rate, at 9.6 percent, was 1.9 percentage points 
lower than last July. This represents the lowest summer youth unemployment rate since 
July 2000. The number of unemployed youth, at 2.2 million in July 2017, declined by 
431,000 from a year earlier. Of the 2.2 million unemployed 16- to 24-year-olds, 1.6 
million were looking for full-time work in July 2017, down 305,000 from July 2016.

In July 2017, the unemployment rates for both young men (10.1 percent) and women 
(9.1 percent) were lower than the summer before. The July 2017 rates for young Whites 
(8.0 percent) and Blacks (16.2 percent) declined over the year, while the rates for 
young Asians (9.9 percent) and Hispanics (10.1 percent) showed little change. 

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The most commonly cited measure, known as "U-3," tracks the percentage of people who are actively seeking work. To be considered unemployed according to the U-3 definition, an individual must have looked for a job within the last four weeks.

However, U-3 and U-6 are by far the most useful and the most cited measures.

U-3 -- Total unemployed, as a percent of the civilian labor force (official unemployment rate).

U-6 -- Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force, plus all persons marginally attached to the labor force.