Posted by: Jim Masterson | 09/16/2009

Civilian Work Force

The plot shown here uses data from the U.S. Department of Labor Statistics.  The light blue dots are total civilian labor force, the light green dots are total civilian employed, and the pink dots are the total civilian unemployment rate.  The black dots are the seasonally adjusted total civilian unemployment rate.  The blue, green, and red lines are 12-month running means of the monthly values (the end-points are a problem–of course).  A 12-month running mean seems to do a better job of filtering out the month-to-month and season-to-season fluctuations and shows the overall trends better.  The vertical brown lines delineate the November elections of each President within the scope of the graph.

Unemployment rate is a lagging economic indicator.  If you want to tie it in to actual events then you’ll have shift the times earlier by about six months.  Notice that we have one of the lowest unemployment rates in history as we near the end of Clinton’s Administration and year 2000.  This is the famous dot-com bubble.  Companies providing no services and no products were popping up everywhere, and investors were flocking to them like flies to honey.  Such companies are flushed out of the economy if there is a slightest downturn.  Unfortunately, when the economic downturn arrived and the subsequent flushing occurred, the large number of failing dot-coms put a heavy drag on the economy.

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