Tuesday, June 19, 2018
Business

All you need are 24 indicators to understand the labor market

WASHINGTON — There was a time when the unemployment rate was good enough.

It was long ago — way back before the recession — in an economy that now feels very far away. In that parallel universe, measuring the share of the workforce that was looking for a job was a perfectly acceptable way of determining the health of the country's labor market. A high unemployment rate was bad. A low unemployment rate was good. Pretty straightforward.

But that number has gotten a lot murkier since the Great Recession. A falling unemployment rate might be bad if it's the result of people dropping out of the workforce because they've given up hope of finding a job. A rising unemployment rate might be good if it means a strong economy is encouraging workers to start looking again.

So economists began looking for better ways to measure the strength of the job market. And they soon realized that one statistic wasn't going to cut it. Federal Reserve Chair Janet Yellen cited several more in a speech last year, including the number of jobs being created, the rate at which workers voluntarily quit their jobs and the size of the labor force.

Since then, the list has grown even longer. Speaking recently in Jackson Hole, Wyo., Yellen pointed to an index boasting 24 indicators developed by Kansas City Fed economists Craig Hakkio and Jonathan Willis as a useful guide to the labor market.

This new tool slices and dices the numbers to come up with two readings of the job market: the level of activity and the level of momentum. The former tells you how things stand, while the latter gives you a sense of where things are going. And both point to the middle of next year for a return to historical norms.

Labor market activity has picked up significantly since the recession — but still remains far below any point since 2008. The good news is that momentum is near the highest point it has ever been, which bodes well.

The economists say their index shows the unemployment rate should actually be 7.1 percent, almost a percentage point higher than the current level of 6.2 percent. In other words, the jobless rate right now is deceptively low.

On the flip side, the index also suggests the unemployment rate overstated how bad things got. Instead of topping out at 10 percent in 2009, it should have clocked in closer to 9 percent.

This index is not the final word in labor market measurement, however. The staff at the Fed's board of governors crafted a similar index using 19 indicators, and private economists have created their own versions. And yet the conclusion at which they all arrive is the same one that many Americans know in their guts, without the help of higher-level math: This recovery is making progress, but it isn't there yet.

Comments
Tech Data sending a record 700 employees to march in Pride Parade

Tech Data sending a record 700 employees to march in Pride Parade

Among the marching bands and twirlers at Saturday’s St. Pete Pride Parade, one major sponsor, Tech Data, is sending by far a record number of employees — more than 700 at last count — to march in Florida’s largest gay pride parade.The parade, which d...
Updated: 17 minutes ago
St. Petersburg residents will see higher water, sanitation bills

St. Petersburg residents will see higher water, sanitation bills

ST. PETERSBURG — Residents can expect their water and sanitation bills to increase between $7 and $11 starting in October.That represents an average of a 7-percent increase. Customers who use an average of 4,000 gallons a month, including reclaimed w...
Published: 06/19/18
Spectrum’s new service will eventually increase the cost for TV

Spectrum’s new service will eventually increase the cost for TV

Spectrum’s new all-digital service is set to bring more high definition, faster internet speeds and expanded on-demand offerings — but it also comes with higher costs for some of its TV customers in Tampa Bay. Each TV that receives service from Spect...
Published: 06/19/18
Pasco Business Digest for June 22

Pasco Business Digest for June 22

Business digestBrieflyHOSPITALS RECEIVE AWARD: Regional Medical Center Bayonet Point and Medical Center of Trinity were recipients of Healthgrades 2018 Patient Safety Excellence Award, a designation that recognizes superior performance of hospitals t...
Updated: 3 hours ago

Hernando Business Digest for June 22

Business digestBrieflyHOSPITAL RECEIVES AWARD: Oak Hill Hospital in Spring Hill was the recipient of Healthgrades 2018 Patient Safety Excellence Award, a designation that recognizes superior performance of hospitals that have prevented the occurrence...
Updated: 3 hours ago
Private Florida firm buys Rent-A-Center in $1 billion deal

Private Florida firm buys Rent-A-Center in $1 billion deal

An Orlando private equity firm has purchased lease-to-own business Rent-A-Center in a deal valued at more than $1 billion.Vintage Capital Management put a bid in for the company on Friday: $15 per share, $1 per share above its previous offer. Rent-A-...
Published: 06/18/18
Report: 40 percent of Florida property will be ‘highly exposed’ to flooding

Report: 40 percent of Florida property will be ‘highly exposed’ to flooding

One of Florida’s biggest draws is also one if its biggest liabilities — its coastline. A new report projects that Florida is at the greatest risk of any state for tidal flooding caused by rising sea levels. And Tampa Bay faces some of the greatest ri...
Published: 06/18/18
Mazzaro’s gets ready to reopen

Mazzaro’s gets ready to reopen

day after an electrical fire broke out in its dry goods warehouse Friday night.Dominic Horwath, a grocery manager at Mazzaro’s on 22nd Ave. N, said staffers spent Monday and the weekend moving things into other warehouses.The damage from the fire at ...
Published: 06/18/18
Mazzaro’s market set to reopen Tuesday after blaze damaged one of its warehouses

Mazzaro’s market set to reopen Tuesday after blaze damaged one of its warehouses

ST. PETERSBURG — Mazzaro’s Italian Market is scheduled to reopen Tuesday after an electrical fire broke out its dry goods warehouse Friday night.Dominic Horwath, a grocery manager at Mazzaro’s on 22nd Avenue N said staff spent Monday and the weekend...
Published: 06/18/18
Developer Grady Pridgen buys St. Pete’s shuttered Edward White Hospital

Developer Grady Pridgen buys St. Pete’s shuttered Edward White Hospital

ST. PETERSBURG — Edward White Hospital, closed four years ago because of declining revenues, has been sold to developer Grady Pridgen for $2.7 million.Pridgen could not be reached Monday for comment. City officials said he has submitted plans for rem...
Published: 06/18/18