The Welch Consulting Employment Index Continues Its Sharp Decline

The Welch Consulting Employment Index fell to 93.3 in July 2012.  An index value of 93.3 means that full-time equivalent employment (from the BLS household survey) is 6.7% below its level in the base year of 1997, after adjusting for both population growth and changes in the age distribution of the labor force.  The index is down sharply over the past three months; the index was 94.7 in April 2012.  The index remains below its level three years ago and is only 1.2% above its historic low reached exactly one year ago.  The index remains weak because part-time employment is at historically high levels and employment growth has barely exceeded population growth over the past year.

The Welch Consulting Employment Index, disaggregated by gender, shows that the labor market recovery has been much weaker for women than men since 2009.  The index for men is 91.2 for July 2012, up 1.9% over the past twelve months, and up 1.2% since July 2009.  The index for women is 96.7 for July 2012, up 0.5% over the past twelve months, but down 1.8% over the past three years.  Finally, since President Obama took office in January 2009, the employment indices are down 2.8% for men and down 4.9% for women.

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey.  The Welch index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the 1997 base year.  The Welch Index adjusts for population growth by fixing total population to its 1997 level.  Seasonal effects are removed in a regression framework using monthly indicator variables.

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