Total Employment

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Total Employment

• Presented by Andrew Swafford, Daniel Coleman,
  Corey Rogers, Brian Thompson

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Federal Funds Rate and Employment

• One of the Federal Reserves primary
  responsibilities is the overall stability of the
  economy
• This includes having both low inflation and low
  unemployment
• As we have learned, however, the tradeoff to
  lower interest rates is inflation..

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The Phillips Curve

• In theory, if the Federal Reserve wanted to lower
  unemployment, they would adopt policies that
  generate more spending (inflation).
• In practice, it is not clear that this curve
  exists because it is said that people anticipate
  the actions of the FED and therefore this
  particular situation cannot be exploited
• One possibility, however, is that the phillips
  curve moves around

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Continued
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Federal Reserve Press Release for February

• Employment in the manufacturing and construction
  industries declined further, but by less than in
  the previous several months.
• The unemployment rate held steady at 4.5 percent.
• The labor market continued strength throughout
  the end and into the beginning of the year.

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Federal Reserve Press Release for April

• Employment gains were moderate in early 2007.
• In February, employment in the construction
  industry declined considerably, in part because
  of severe winter storms and manufacturing
  employment also declining.
• Evidence suggest that labor markets will remain
  relatively tight
• The unemployment rate held steady at around 4.5
  percent.

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Current Population Survey

• Monthly survey of households conducted by the
  bureau of census for the Bureau of Labor
  Statistics that provides a body of data on the
  labor force, employment, unemployment, and
  persons not in the labor force

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Current Employment Statistics

• Each month the current employment statistics
  (CES) program surveys about 160,000 businesses
  and government agencies, representing
  approximately 400,000 individual worksites
• Survey is conducted in order to provide detailed
  industry data on employment, hours, and earnings
  of workers on non-farm payrolls.

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Total Employment
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Employment Levels 16 and Over (CPS)
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What This Means..

• From Jan. of 2004 to March of 2007, employment
  levels have increased a total of 5.62, even
  though there are monthly fluctuations
• There are many unknown factors that affect
  employment, ranging from oil prices to weather
  changes

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Employment Population Ratio

• The proportion of the civilian non-institutional
  population aged 16 years and over that is
  employed
• This is a part of the Bureau of Labor Statistics
  Current Population Survey

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Employment-Pop Ratio 16 and Over
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What This Tells Us.

• Through January 2005 to December of 2006, the
  employment population ratio saw a steady increase
  
• After its highest levels in 2006, after six
  months, the numbers have leveled off, suggesting
  that it will not go up in the near future
• This suggests, as the FED stated earlier, that
  the labor market is getting tight firms are
  losing their capacity to higher and an increase
  of wages might ensue

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Labor Force Participation
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Labor Force Participation
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Labor Force Participation Rates Analysis

• As the Federal Reserve suggested, this graph
  indicates that the Labor Market is relatively
  tight
• This means that firms are having a hard time
  finding workers to fill positions, suggesting a
  possible rise in wages

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Employment Situation March 2007

• Nonfarm payroll employment grew by 180,000 to
  137.6million in March.
• Construction employment was up by 56,000 in
  March.
• Retail trade employment rose by 36,000 in March.
• Employment in health care continued to grow in
  March (30,000).
• Manufacturing jobs continued to tend down.

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Recommendations

• After reviewing the current status of the Labor
  Market, we feel that the Federal Funds Target
  Rate should be held constant at 5.25
• With what appears to be a strong labor force, the
  Federal Reserve should be more concerned with
  inflationary pressures that are considered to be
  prevalent in the current state of the economy
• By holding rates constant, employment rates
  should remain strong

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Works Cited

• www.bls.gov
• www.federalreserve.gov
• http//www.moneycafe.com/library/fedfunds

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Multiple Choice Question 1

• How much has the employment level changed since
  January of 2004?
• A) 6.88
• B) 5.62
• C) 1.25
• D) 9.87
• Answer- B

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Multiple Choice Question 2

• Currently, the labor force is
• A) strong
• B) weak
• C) disappearing
• D) tense
• Answer- A

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Multiple Choice Question 3

• In March of 2007, which employment category had
  the most growth in amount of jobs?
• A) Government
• B) Education and Health Services
• C) Manufacturing
• D) Construction
• Answer- D

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Multiple Choice Question 4

• Which demographic group had the greatest increase
  in labor force participation rates?
• A) Seniors 55 years and older
• B) Men 16-24 years
• C) Women 25-54 years
• D) Women 16-24 years
• Answer- C