Friday, April 12, 2019

A Collapse in 2009 Was Always A Sure Thing...Just Like Recession (or Worse) in 2019

I recently detailed why a recession is imminent based on a few factors, chiefly full employment among the working age segments of the population and minimal population growth among the same segments, detailed HERE.  However, today I wanted to outline the impact that women moving into the labor force had on growing the labor force, but why this growth has ceased.  I'll also point out that the 2008-'09 financial crisis was a demographically driven crisis that was set decades earlier.

15 to 24 Year Olds
The chart below shows 15 to 24 year old employed males and females, from 1960 to present.  Based on the peak 15 to 24 employment in 1979 (and subsequent four decades of decline), there was always sure to be a like peak (and like fall) among the 25 to 54 year old core population 30 years later...or 2009.  Noteworthy is the relatively larger decline in employment among males than among females...and the fact that men and women make equal parts of the total employed persons.
The 15 to 24 year old percentage of males and females employed, chart below.  The peak in the percentage of males employed was in 1979 at 67% and 1989 at 59% for females.  Both have been receding since and sit at 50%.
15 to 24 year old male population and employees, 1960 to present, below.  While the total 15 to 24 population has essentially been unchanged since 1979, the total number of 15 to 24 employed males has consistently been in decline since 1979, a fall of 2.7 million (a 21% fall) over the last 40 years.
15 to 24 year old female population and employees below, 1960 to present.  Peak 15 to 24 female employment came in 1979 and currently sits 1 million fewer than that peak (a 9% fall).

25 to 54 Year Olds
25 to 54 year old employed male and females, below.  From 1960 to 2000, male employment rose 23 million while female employment rose a massive 32 million.  Contrast that with since 2000, the quantity of employed males has increased by just 1.1 million and females by 1.3 million.  Today, there are still 600 hundred thousand fewer employed males than in 2007 while employed females have increased by just 800 hundred thousand.
The percentage of 25 to 54 employed males has been in secular decline since mid-1960.  However, the percentage of 25 to 54 females rose sharply from 1960 to 2000, but has like males, been in decline since 2000.
25 to 54 year old male population and employees, below.  With minimal population growth and full employment, there is little chance for further growth in employment.
Chart below is 25 to 54 year old female population and employees.  Ditto for the lack of population growth and minimal further employment growth.
55-64 Year Olds
55 to 64 year old male and female employees, below.  No growth among male employees from 1960 through 1994 while females rose by 2.4 million.  Since 1994, male 55 to 64 employment has risen by over 8 million and female employment by 7.7 million.

55 to 64 year old male and female employed percentages charted below.  The decline in the percentage of males employed to 1994 and slight rise since.  The percentage of 55 to 64 females employed consistently rose from '60 to '08, but like the percentage of males employed, appears to have hit peak employment since '08.
55 to 64 year old male population and employees, charted below.  The growth of the 55 to 64 male/female population, and employed among them, has been the saving grace for the US over the past 25 years.  However, the demographically driven 55 to 64 population growth impetus is fast coming to an end.
55 to 64 year old female population and employees, below.
65+ Year Olds
That tell-tale baby-boom population surge is now heading into the 75+ year old population segment (grey line below)...a group that has an 8% labor force participation rate.  Even the 65 to 74 year old labor force participation rate is just 27%.  Elderly population growth does not equate to employment or economic growth.

And finally, a juxtaposition of no rise (net) in births for five decades, (and now nearly a half million annual decline in births since 2007), versus a near doubling in total population.  Big details, like the lack of working age population growth, subsequent employment growth, and resultant economic growth...can be hidden in big numbers.
The possibility of the female working age population has been fully realized, and now appears to be at full employment.  Population growth in America has shifted to the elderly, that have very low labor force participation rates.  Presently, and for at least the next decade, there is no clear impetus for further growth in employment, except participation rates moving well above historical norms and/or elderly remaining in the labor force far beyond expected levels.  Without the growth in employment, there is no impetus for growth in consumption, new housing creation, or economic growth.

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