Despite Drop in Unemployment Rate the Welch Consulting Employment Index Declined in November

The Welch Consulting Employment Index is 94.6 for November 2012, down from 94.8 in October.  The slight decline is due in part to the impact of Hurricane Sandy in New York and New Jersey.  The employment index dropped despite the fall in the U.S. unemployment rate because fewer people were working in November, as a fraction of the total population, compared to October.  An index value of 94.6 means that full-time equivalent employment (from the BLS household survey) is 5.4% 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 has recovered from sharp declines in the summer of 2012 and is the same as it was in February 2012.  This means that full-time employment has kept pace with population growth over the past nine months.  Over the past five years the Welch Consulting Employment Index has fallen 6.3% (it was 101 in November 2007).

The Welch Consulting Employment Index, disaggregated by gender, is 92.5 for men and 97.3 for women.  Both the indices for men and women are down slightly from October.  Over the past nine months the men’s index is up 0.3% while the women’s employment index is down 0.3%.  Over the past five years the men’s employment index has declined by 7.2% and the women’s index has declined by 5.4%.



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.


  1. […] a more robust measure of labor market activity.  At Welch Consulting we have constructed such an employment index that corrects for changes in the age distribution of the population and the difference between […]

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