Question

The Bureau of Labor Statistics reported in December 2019, seasonally adjusted total nonfarm payroll employment increased by 320,000 to 278,888,000 and the unemployment rate decreased from 3.5 percent to 3.3 percent. About 1.6 million people were marginally attached workers and 375,000 of them were discouraged. a. Calculate the change in unemployment in December 2019. b. With 1,600,000 marginally attached workers and 375,000 of them discouraged workers, what are the characteristics of the other 1,225,000 marginally attached workers?

Answer 1

a)

Total employment in December 2019= 278,888,000= x

Let unemployed in this period be U. So,

Unemployment rate = 3.3% = U/(x + U) ×100

Solving for U, we get U = 9,518,362

Total employment before December 2019 = 278,888,000-320,000

= 278,568,000= y

Let the unemployed in this period be U'. So,

Unemployment rate = 3.5% = U'/(y + U') × 100

Solving for U' we get, U' = 10,104,026

Change in unemployment = U - U' = 9,518,362 - 10,104,026

= - 585,664

b)

The rest of the 1,225,000 individuals are basically able to and willing to work but aren't actively seeking employment. This could attribute for a multitude of reasons like taking a break, personal reasons, following passion for a while or just any other reason which makes them marginally attached.

These individuals are not a part of the labor force but they are willing to work, and have looked for a job sometime in the past 12 months, but are not essentially counted as unemployed as they haven't searched for work during the 4 weeks before the survey took place.

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