Economics Blog

Alabama Market through October 2018: Although the Labor Force Increased so Did the Unemployment Rate

Using data sets from the Bureau of Labor Statistics, we can get a reasonable view of the Alabama marketplace since the beginning of 2018. Thus, we will explore four factors with respect to the marketplace: the number of employed, the labor force, the number of unemployed, and the unemployment rate. Moreover these four factors will provide us with a labor rating of Alabama.

Number of Employed

There are two pieces of information to take away from this data set:

  1. First, the number of employed increased by 43,094 workers between January and October.
  2. Second, the number of employed increased by 2.1 percent in that same time frame.

Labor Force

There are two pieces of information to take away from this data set:

  1. First, the labor force (employed and unemployed) increased by 52,041 between January and October.
  2. Second, the labor force increased by 2.4 percent in this same period.

Number of Unemployed

There are two pieces of information to take away from this data set:

  1. First, the number of unemployed increased by 8,947 between January and October.
  2. Second, the number of unemployed increased by 11.1 percent in this same same time frame.

Unemployment Rate

There are two pieces of information to take away from this data set:

  1. First, the unemployment rate increased by 0.4 points between January and October.
  2. Second, the unemployment rate increased by 10.8 percent in this same period.

Summary:

Although the number of employed and the labor force increased between January and October, which is in line with national trends, the number of unemployed and subsequently the unemployment rate both increased in that same period. Thus, the labor force, which is equal to the number of employed plus the number of unemployed, increased via the number of employed and the number of unemployed.

Therefore, the increase in the number of unemployed would explain the increase in the unemployment rate, since the number of unemployed increased by 11.1 percent and the number of employed increased by 2.1 percent. Thus, these two economic factors – number of unemployed and unemployment rate – buck national trends and give Alabama a 2 out of 4 rating, where a 4 out of 4 rating would be increased number of employed, increased labor force, decreased number of unemployed, and decreased unemployment rate.

Definition:

The Labor Force in this case is every person, not in the military and 16 years or older, who is either employed or unemployed (and looking for work).

  • Labor Force = Number of Employed + Number of Unemployed

Unemployment Rate is the Number of Unemployed divided by the Labor Force.

 

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