Courtesy of Doug Short
Following up on my earlier update on unemployment and the market, here is an overlay of the unemployment rate and the employment-to-population ratio (age 16 and over).
The inverse correlation between the two series is obvious, and we can readily see the rise in two-income households. The recent ratio low of 58.2% in November 2010 and December 2009 was a level not seen since August 1983. In fact, those recent lows were almost back to the 58.1% ratio of March 1953, when Eisenhower was president, the Korean War was still underway, and rumors were circulating that soft drinks would soon be sold in cans.
The employment-population ratio will be interesting to watch going forward. The first wave of Boomers will be a downward force on this ratio. The oldest of them were eligible for early retirement when the Great Recession began, and the Boomer transition to the retirement will accelerate over the next several years.
