December employment numbers were out a couple of weeks ago. I should catch up! The participation rate fell from 62.6% to 62.4%. The only demographic group that exceeded this percentage is Men over the age of 15 with a 68.6% rate.
I’m going to declare the Obama Presidency to be complete as of the December reading. With the January reading in two weeks, I’ll declare the start of the Trump Presidency. I want to focus on employment over the next four years because President Trump has stated he will create 25 million new jobs. With that, I’ll look at the prior eight years.
In January 2009, the participation rate was 65.4% and the unemployment rate was 8.5%. With the most recent report, unemployment has fallen to 4.5%. President Obama has received credit for decreasing the unemployment number, but let’s take a deeper look since the participation rate has fallen.
The employment level has risen from 140,436 to 151,798 (these numbers are in thousands). That’s a net increase of 11.362 million jobs. To judge whether that is good or bad, let’s use the beginning participation rate and apply it to the current population level (current population times the beginning participation rate minus the current labor force). Using this calculation yields an additional 7.553 million employed people if the participation rate has remained constant. My conclusion is President Obama should get credit for increasing employment by 11 million and should get criticism for not increasing employment by the combination of 11 million and 7 million.
If President Trump is going to reach his target of 25 million new jobs in four years, he will need to increase the participation rate. The employed level is 151.798 million people and the labor force is 158.968 million. If we add together the current employed number plus the 25 million and divide by the population level, we get an implied participation rate of 69.4%. This is a remarkable number since the maximum rate over the last fourteen years is 67.0%. The highest this series has reached since 1947 is 68.1% in July 1997. I’m not saying it is impossible to achieve 25 million new jobs, but achieving it would be an amazing feat.