Federal Reserve Economic Data

As we discussed in the previous post, firms everywhere are having serious difficulties filling vacancies. With these worker shortages on everyone’s minds, let’s discuss how the pandemic has shaped the workforce.

The FRED graph above shows the fraction of people who participate in the labor force—that is, who either have a job or are actively looking for one—by age group. In previous recessions, only teenagers had significant declines in participation rates; clearly, most workers who lost their jobs kept looking for another. In 2020, however, participation rates declined across the board, with would-be workers leaving the labor force in the face of widespread shutdowns, health concerns, school closures, and financial support from the government.

That said, different age groups clearly reacted to the recent recession in different ways. Older workers’ participation rates declined through 2021—probably led by a wave of early retirees—but prime-age workers’ rates plateaued slightly below their pre-pandemic levels. It’s likely that some would-be workers remain out of the labor force because of lingering health concerns and childcare needs.

Now, what about teenagers today? The participation rate for 16- to 19-year-olds has increased beyond its pre-pandemic level. It’s possible some of this is related to historically low undergraduate enrollment, with high school graduates opting for work in the tight labor market over potentially remote learning.

How these graphs were created: Search for and select “Labor force participation rate – 16-19 Yrs.” From the “Edit Graph” panel, use the “Add line” tab to search for and add “Labor force participation rate – 20-24 Yrs.” Do the same for “Labor force participation rate – 25-54 Yrs.” And “Labor force participation rate – 55 Yrs. & Over.” Set the date range to mirror the dates shown in the blog post.

Suggested by Carlos Garriga and Devin Werner.

Successful vaccines are bringing the pandemic effectively to an end. And, as economic activity resumes, firms everywhere appear to be having serious difficulties hiring: The news is filled with middling labor market reports, alarming anecdotes, and long restaurant wait times.

The FRED graph above quantifies this shift by depicting, across industries, the number of job openings at the end of each month. It’s very clear that across the board this number has jumped significantly, especially in the past few months.

Such a jump is a very positive development for the U.S. economy. The number of job openings at any given time is affected by both how difficult it is for firms to fill openings and how many openings firms offer in the first place. Insofar as the recent increase is caused by firms expanding, it’s clear that firms are expecting future business growth. Consult the graph to compare the recent jumps to the much lower number of job openings after the Great Recession and its lengthy “jobless recovery.”

The industry-level numbers are noteworthy: The leisure and hospitality industry, frequently the focus of news stories about worker shortages, has had the largest increase in job openings. But the other industries aren’t far behind, despite being significantly less impacted by the pandemic, as data from the same data release show. While leisure and hospitality lost over 3 million jobs in 2020, the others lost less than a million. Chalk that up to the pandemic’s lopsided impact on these various industries.

Stay tuned for part 2 of this post: “The health of labor markets post-pandemic: The supply perspective.”

How these graphs were created: First graph: Search for and select “Job openings: Health care and social assistance.” From the “Edit Graph” panel, use the “Add line” tab to search for and add “Job openings: Leisure and Hospitality.” Do the same for “Job Openings: Manufacturing” and “Job Openings: Trade, Transportation, and Utilities.” Adjust the date range to mirror the dates shown in the blog post. Second graph: Search for and select “Hires: Health Care and Social Assistance.” From the “Edit Graph” panel, use the “Edit Line” tab to modify frequency to be annual with “Aggregation method” set to “Sum”; then add “Total Separations: Health Care and Social Assistance” under “Customize data” and set “Formula” to “a-b.” Do the same for the other industries (“Leisure and Hospitality,” “Manufacturing,” and “Trade, Transportation, and Utilities”), adding hires for each using the “Add line” tab and then repeating the steps above. Finally, go to the “Format” tab and set “Graph type” to “Bar” and set the date range to mirror the dates shown in the blog post.

Suggested by Carlos Garriga and Devin Werner.

The FRED Blog has covered the changes in household net worth throughout 2020, describing how different household groups experience different changes in their balance between assets and liabilities during the COVID-19-induced recession:

• The uncertainty of the first few months of the pandemic shook financial markets and resulted in larger net worth losses for the top 1% of households by wealth. This group holds the largest volumes of financial instruments or stakes in businesses.
• By the second half of the year, the growth in home prices yielded larger gains to the bottom 50% of households by wealth. This group holds a larger proportion of their wealth in real estate assets.

Today’s question is, Whose assets have grown in value faster than their liabilities during 2020? That is, whose net worth has increased the most?

The FRED graph above shows that, since the end of 2019 until the time of this writing, the least-wealthy households have seen their net worth grow by as much as 30%. That is the fastest growth of all four household groups.

Because we’re talking about net worth and not income, translating this improved wealth position into increased current or future consumption isn’t necessarily straightforward. In fact, this much quoted study by Neil Bhutta and Lisa Dettling at the Board of Governors documents how, regardless of their wealth, many families hold very little cash in hand.

How this graph was created: From FRED’s main page, browse data by “Release.” Search for “Distributional Financial Accounts” and select “Levels of Wealth by Wealth Percentile Groups.” From the table, select the “Total Net Worth” series held by each of the four wealth quantiles and click “Add to Graph.” Next, change the units to “Index (Scale value to 100 for chosen date)” and enter “2019-04-01,” the quarter prior to the start of the COVID-19-induced recession. Click “Copy to all” and change the start date of the graph to 2019-12-01. To use the same graph style shown here, use the menus in the “Format” tab.

Suggested by Diego Mendez-Carbajo.