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Labor Force & Unemployment – Finger Financial Five 179

Labor Force & Unemployment

“There are lies, Damned lies, and Statistics.” – Mark Twain 

How Can Unemployment Rise Even as Jobs Increase? 

At first glance, it seems contradictory: more jobs are being created, yet the unemployment rate is climbing. The explanation can be found in how the labor force dynamics can evolve.  

  1. New Entrants to the Labor Force: Each month, new individuals, often young people reaching the age of 15, are added to the labor force. As they become eligible to work, they start looking for jobs, which increases the number of people counted as unemployed. (A large amount of them can remain in the ‘looking for work’ stage before finding work and counting as employed) 
  2. Discouraged Workers Returning: Individuals who were previously discouraged and stopped looking for work may re-enter the job market. (See the qualifications below for who counts as unemployed and who doesn’t.) Once these discouraged workers start looking for jobs again, they are considered unemployed until they secure employment. 
  3. Retirees Rejoining the Workforce: Some retired individuals may decide to re-enter the labor force for various reasons, such as financial needs or personal fulfillment. Upon re-entering, they also are now classified as unemployed until they find jobs. 

Some specific nuances are important to remember when examining these statistics. Someone is only considered ‘Unemployed’ if they meet all of these qualifications: 

  1. Not currently working. 
  2. Actively looking for a job within the past four weeks. 
  3. Available to work.

Individuals age 15 and older who are either employed or unemployed while actively seeking work count as being in the ‘Labor Force’. (This group excludes institutionalized individuals.)

Understanding these dynamics and how they can change helps us understand what might really be happening in the economy today. The labor force is not static, and various factors can lead to an increase in unemployment statistics despite a growing job market. 

My favorite lesson from this topic though is that statistics without context are often misleading.  

On the lighter side, Elliott is working at Riverbend this summer. He is working on helping create thumbnails for videos we are producing. He is also partly responsible for quality control. His generation has probably watched more videos than ours in less than half the time!  So Elliott probably has a generational advantage over the rest of us in the office, in this regard.  

Oh, yes, and he beat me in chess again… 

Best of the Beach is now open for voting! We were thrilled to win in the Wealth Management category last year. Today is the last day to vote for who you think should win Best of the Beach in a range of different categories!

Hope all is well with you and your family, 

Jeremy 

There is no affiliation between Riverbend Wealth Management, Stratos Wealth Advisors & The Sun News. Best of the Beach invites, engages, and allows its audience to recognize businesses and professionals who support, serve, and do business in the Myrtle Beach area. They rely on their audience to submit nominations. When nominees are finalized, the audience is asked to vote on one choice in each category; there are over 200 categories. Businesses, organizations, or individuals that are nominated by our audience will be placed on our ballot after they are verified. There is no cost or obligation to participate.

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles so that you will have more clarity that help you make better financial decisions.

Investment advice is offered through Stratos Wealth Advisors, LLC, a registered investment advisor.  Stratos Wealth Advisors, LLC and Riverview Wealth Management are separate entities.

The information presented in this newsletter is the opinion of the writer and does not reflect the view of any other person or entity.  The information provided is believed to be from reliable sources, but no liability is accepted for any inaccuracies.  This is for information purposes only and should not be construed as an investment recommendation. 

Past performance is not necessarily indicative of future results, and there is no assurance that the investment objective will be achieved or that the strategies employed will be successful. All investments involve risk and, unless otherwise stated, are not guaranteed.

The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.

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