#laborsupply

[farademetre]

Nike, Duolingo, and Earnings Forecast - InvestTalk Caller Questions

Listeners wanted updates on Campbell Soup, Duolingo, Nike’s earnings outlook, Robinhood, and major copper projects, all while keeping an eye on Jerome Powell’s comments about job-market challenges, from tight labor supply to immigration pressures.

[unitedstatescommonsense]

California’s Declining Labor Force Participation Rate

by Research Analyst Davina Kaldani

Source: Business Cycle Expansions and Contraction, Local Area Unemployment Statistics.

California’s labor force participation rate (LFP rate) – the percentage of the working-age adults who are either employed or looking for a job – has been in a virtual constant decline since early 2000s. During previous economic recoveries, the unemployment rate declined while the LFP rate increased. For the first time since the 1970s, both the labor force participation rate and the unemployment rate are declining during a period of economic recovery. We see this trend beginning in the 2000 recovery and continuing through the post-2009 recovery. The LFP rate is now at its lowest level (62.4%) since June 1976.

This decline in the LFP rate is most likely driven by a drop in the working-age population (i.e., the aging and retirement of baby boomers). The other potential source of LFP decline is an economic downturn – but California’s economy is slowly recovering (GDP is growing and unemployment is declining).

A declining LFP rate, together with a slower projected population growth rates for California, is likely to reduce the labor supply  (the number of workers willing and able to work in a given occupation for a given wage). A labor shortage could potentially reduce the state’s economic growth rate relative to the previous decade.