Written by Jill Mislinski

Last week's Employment Report for January disappointed forecasts. The unemployment rate ticked down to 4.9% and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) dropped to 151K with December's number revised downward by 30K. Our preference is to look at the data from a longer-term perspective and to give special attention to the data for the core workforce, ages 25-54. We continue to see evidence of major structural changes in the US workforce.

Here is an updated series of charts illustrating some changes that are far more significant than the cyclical impact of the 18-month Great Recession, which the NBER identified as beginning in December 2007.

The Unemployment Rate: Additional Jobs Needed to Match Lows

The closely watched headline unemployment rate is a calculation of the percentage of the Civilian Labor Force, age 16 and older, currently unemployed. Let's put that into its historical context. The first chart below illustrates this monthly data point since 1990.

The indicator for January ticked down to 4.9%. Today's Civilian Employed would require 800,000 additional job holders to match its interim low in 2007, and we would need 1.7 million to match the lowest rate in 2000. This is better than last month's 1.0M and 1.8M.

Additional Jobs Needed for the Prime Employment Age Group

Let's look at the same statistic for the core workforce, ages 25-54. This cohort leaves out the employment volatility of the high-school and college years, the lower employment of the retirement years and also the age 55-64 decade when many in the workforce begin transitioning to retirement (e.g., two income households that evolve into one-income households).

In the latest data this indicator has dropped from 4.4% to 4.2%. The cohort population went up by 278 thousand, and the number of employed rose 607 thousand. The labor force headcount of this prime cohort increased by 495 thousand.