Data for Decision-Makers

When employment goes up, unemployment goes down. The two are inversely proportional ... most of the time. It is possible, however, for a geography to experience a simultaneous decrease in the number of people employed and the number of people unemployed.

A decrease in both indicates that the overall size of the labor force has decreased. This may be due to an increase in the number of people removing themselves from the labor force and furthering their education (which is typical during a recession), or an increase in the number of retirees. Or it may be due to more troubling factors like an increase in the number of unemployed persons who have stopped looking for work altogether (also typical in a recession), or a decrease in overall population of the geography.

A review of some key definitions will shed additional light on the subject (or maybe confuse you further).

Labor Force
The labor force is the sum of all employed and unemployed individuals.  It is part of the civilian non-institutional population, which includes everyone over the age of 16 not serving military Active Duty or residing in an institution.

Those who are not looking for work or whose only activity in the reference week consisted of work in their own home and/or volunteer work are part of the civilian non-institutional population, but NOT part of the labor force.

The labor force is divided into two groups:

Employed

• Are counted only once, no matter how many jobs they hold
• Were paid for at least one hour of work during the reference week; or
• Worked in their own business, profession, or farm; or
• Worked at least 15 unpaid hours in an enterprise owned by a family member; or
• Were temporarily absent due to vacation/leave, bad weather, labor-management dispute, job training, or other personal or family reasons, regardless of whether he or she was paid or was seeking other employment.

Unemployed

• Have had no employment during the reference week; and
• Were available to work, except for temporary illness; and
• Made an effort to find employment during the previous four weeks; or
• Were laid off from a job and waiting to be recalled are also considered unemployed.

So, when you hear an economist or labor market analyst say "job growth", they are really talking about employment growth.  And you should never hear these folks use the word "workforce" when they quantify anything, because the term is not technically in the vernacular of any of the federal statistical agencies. If you are still not clear, you should probably talk to Morton Marcus, Indiana's foremost expert on labor statistics.