by Calculated Danger on 12/31/2024 01:13:00 PM
Earlier I posted some questions on my weblog for subsequent yr: Ten Financial Questions for 2025. A few of these questions concern actual property (stock, home costs, housing begins, new dwelling gross sales), and I posted ideas on these within the publication (others like GDP and employment shall be on this weblog).
I am including some ideas and predictions for every query.
Here’s a overview of the Ten Financial Questions for 2024.
4) Participation Charge: 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 degree 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 pressure participation fee is the share of the working age inhabitants (16 + years previous) within the labor pressure. A big portion of the decline within the participation fee since 2000 was as a result of demographics and long-term developments.
The Labor Pressure Participation Charge in November 2024 was at 62.5% (crimson), down from the pre-pandemic degree 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 pressure because of the pandemic. By November 2024, the labor pressure was about 4 million greater than the pre-pandemic excessive.
For individuals who comply with the family survey employment quantity together with the nonfarm payroll survey numbers, it’s price noting that the housing survey numbers are “controlled” to the newest 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 development 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 tip of this yr are revised in January to replicate inhabitants benchmark revisions, one ought to anticipate a large upward revision.
It will revise up the variety of individuals employed within the family survey nonetheless this won’t impression the participation fee.
The second graph reveals the participation fee for “prime age” staff (25 to 54 years previous). The 25 to 54 participation fee was at 83.5% in November 2024 Crimson), above the pre-pandemic degree of 83.0%. This implies the entire prime age staff have returned to the labor pressure.
Since virtually the entire staff impacted by the pandemic have returned to the labor pressure, demographics would be the key driver of the participation fee in 2025 (barring some unseen occasion). Demographics shall be pushing the participation fee down over the following decade, so, my guess is the participation fee will decline to round 62.2% in December 2025.
