by Calculated Threat on 12/31/2024 01:13:00 PM
Earlier I posted some questions on my weblog for subsequent 12 months: Ten Financial Questions for 2025. A few of these questions concern actual property (stock, home costs, housing begins, new house gross sales), and I posted ideas on these within the publication (others like GDP and employment might be on this weblog).
I am including some ideas and predictions for every query.
Here’s a evaluation of the Ten Financial Questions for 2024.
4) Participation Price: In November 2024, the general participation fee was at 62.5%, down year-over-year from 62.8% in November 2023, and under the pre-pandemic stage of 63.3% in February 2020. Long run, the BLS is projecting the general participation fee will decline to 61.2% by 2033 as a result of demographics. What’s going to the participation fee be in December 2025?
The general labor power participation fee is the proportion of the working age inhabitants (16 + years outdated) within the labor power. A big portion of the decline within the participation fee since 2000 was as a result of demographics and long-term traits.
The Labor Pressure Participation Price in November 2024 was at 62.5% (crimson), down from the pre-pandemic stage of 63.3% in February 2020, and up from the pandemic low of 60.2% in April 2020. (Blue is the employment inhabitants ratio).
From February 2020 to April 2020, 12 million individuals had left the labor power because of the pandemic. By November 2024, the labor power was about 4 million greater than the pre-pandemic excessive.
For individuals who observe the family survey employment quantity together with the nonfarm payroll survey numbers, it’s value noting that the housing survey numbers are “controlled” to the most recent Census inhabitants estimates and one-year forward projections. As such, the 2024 family employment numbers are “controlled” to the Classic 2023 employment projections for 2024. The Classic 2023 projection for YOY resident inhabitants progress from December 2023 to December 2024 was 1,724,847, in comparison with the Classic 2024 projection over this era of two,745,741. As such, when the family survey employment estimates for the top of this 12 months are revised in January to mirror inhabitants benchmark revisions, one ought to anticipate a large upward revision.
This may revise up the variety of individuals employed within the family survey nonetheless this won’t affect the participation fee.
The second graph exhibits the participation fee for “prime age” staff (25 to 54 years outdated). The 25 to 54 participation fee was at 83.5% in November 2024 Crimson), above the pre-pandemic stage of 83.0%. This means the entire prime age staff have returned to the labor power.
Since virtually the entire staff impacted by the pandemic have returned to the labor power, demographics would be the key driver of the participation fee in 2025 (barring some unseen occasion). Demographics might be pushing the participation fee down over the subsequent decade, so, my guess is the participation fee will decline to round 62.2% in December 2025.
