Thursday, May 4, 2017

Labor force dynamic equilibrium

Employment data comes out tomorrow and I have some forecasts that will be "marked to market" (here's the previous update). If the unemployment rate continues to fall, then we're probably not seeing the leading edge of a recession.

I thought I'd add a look at the civilian labor force with the dynamic equilibrium model:

In this picture, we have just two major events over the last ~70 years in the macroeconomy: women entering the workforce and the Great Recession (where people left the workforce). This is the same general picture for inflation and output (see also here). Everything else is a fluctuation.

We'll get a new data point for this series tomorrow as well, so here's a zoomed-in version of the most recent data:


Update 5 May 2017

Here's that unemployment rate number. It's looking like the no-recession conditional forecast is the better one:

No comments:

Post a Comment

Comments are welcome. Please see the Moderation and comment policy.

Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.