Job market remains tight in 2019, as the unemployment rate falls to its lowest level since 1969

A decade after the end of the Great Recession, the U.S. economy continued to expand, and the labor market remained strong by historical standards. By the end of 2019, the economy had grown for 126 months or 42 quarters, making it the longest economic expansion on record.¹ Most labor force measures continued to improve throughout 2019. Total employment, as measured by the Current Population Survey (CPS), expanded by 2.0 million, reaching 158.6 million by the end of the year. In addition, the employment–population ratio (the percentage of the population age 16 and over who are employed) continued to increase as well, reaching 61.0 percent. There were 5.8 million people unemployed in the fourth quarter of 2019, down 341,000 from a year earlier, and the jobless rate declined to 3.5 percent, the lowest rate in 50 years.² (See the box that follows for more information about the CPS, as well as the Current Employment Statistics survey.)

This article highlights important developments in key labor market measures from the CPS during 2019, both overall and for various demographic groups. The article also examines changes in usual weekly earnings and in labor force status flows, as well as the employment situations of veterans, people with a disability, and the foreign born.

Employment grew in 2019; unemployment rate fell to lowest level since 1969

The number of employed people increased by 2.0 million over the year, reaching 158.6 million in the fourth quarter of 2019. This growth was smaller than the over-the-year increase of 2.8 million in 2018, partly reflecting slower population growth.

Although employment trended up at a slower pace, both the employment–population ratio and the labor force participation rate increased in 2019. (The labor force participation rate is the percentage of the population age 16 and over who are either employed or actively seeking employment.) In the fourth quarter of 2019, the employment–population ratio was 61.0 percent, up by 0.4 percentage point over the year. Although this ratio has been trending up since 2014, it is still below its level in the years leading up to the Great Recession, having reached 63.3 percent in the fourth quarter of 2006 and the first quarter of 2007. The labor force participation rate increased by 0.3 percentage point, to 63.2 percent in the fourth quarter of 2019, but this measure has been fairly flat in the past 5 years, ranging from 62.5 percent to 63.2 percent. (See figure 1 and table 1.)

In the fourth quarter of 2019, the number of unemployed people, at 5.8 million, was down by 341,000 from a year earlier.³ The national unemployment rate fell by 0.3 percentage point over the year, to 3.5 percent, the lowest jobless rate since 1969.⁴ (See figure 2.)

Employment grew for most demographic groups; labor force participation increased for Whites and Hispanics but changed little for Blacks and Asians

Over the year, the employment–population ratio for women increased by 0.5 percentage point, to 55.6 percent, and the ratio for men increased by 0.4 percentage point, to 66.7 percent. Both measures have increased in recent years and are at their highest levels since 2008. The labor force participation rate for women rose by 0.4 percentage point, to 57.7 percent, following a similar increase in 2018. The labor force participation rate for men, at 69.2 percent, was little changed over the year and has shown little movement since the end of 2014.

In 2019, the employment–population ratios increased for Whites, Blacks, Hispanics, and Asians.⁵ The ratio for Hispanics increased by 0.9 percentage point, to 64.5 percent, and the ratio for Whites increased by 0.4 percentage point, to 61.2 percent. The employment–population ratio for Blacks increased by 0.8 percentage point, to 59.1 percent, the highest it has been since the third quarter of 2001. The ratio for Asians increased to 62.8 percent in the fourth quarter of 2019, a gain of 0.8 percentage point over the year.

The labor force participation rates increased over the year for Whites, by 0.3 percentage point, to 63.2 percent, and for Hispanics, by 0.8 percentage point, to 67.3 percent, but these rates were about unchanged for Asians (64.5 percent) and Blacks (62.6 percent).

Unemployment rate reached lowest level since 1969

The number of people unemployed was 5.8 million in the fourth quarter of 2019, down by 341,000 from a year earlier. The change in the number of unemployed people followed 2 years of larger declines. The national unemployment rate declined by 0.3 percentage point over the year, to 3.5 percent in the fourth quarter of 2019. Although the decrease in the number of unemployed people was relatively small by historical standards, the jobless rate fell to its lowest level since 1969, when it was 3.4 percent.

In 2019, the unemployment rates declined to 3.5 percent for both men and women. Among the major race and ethnicity groups, the unemployment rates for Blacks (5.6 percent) and Hispanics (4.1 percent) were at record lows in the fourth quarter of 2019. The rates for both groups had been at double-digit levels for several years following the 2007–09 recession. Over the year, the unemployment rate for Whites decreased by 0.2 percentage point, to 3.2 percent, and the jobless rate for Asians was little changed, at 2.7 percent.(See figure 3.)

Jobless rate decreased, employment increased for older workers

Much of the labor market improvement in 2019 occurred among older workers. Among workers age 55 and over, the unemployment rate was 2.5 percent in the fourth quarter of 2019, a decline of 0.4 percentage point from 2018. For older men, the unemployment rate declined by 0.4 percentage point, to 2.4 percent, while the rate for older women was little changed, at 2.7 percent. Nearly half of the increase in employment over the year occurred among workers age 55 and over, with 927,000 more employed people in that age group than in the previous year. (See table 2.)

Although the labor force participation rate for older workers (those age 55 and over) was little changed over the year, there was an increase in the labor force participation rate among people age 65 and over. The rate for those age 65 and over increased by 0.7 percentage point, to 20.5 percent in the fourth quarter of 2019. (Data for those age 65 and over are not seasonally adjusted.) (See table 3.)

The labor force participation rate for people 65 years and over has been trending up for more than 30 years. The rate was 28.1 percent in the fourth quarter of 1948, before showing a downward trend in the years that followed. The participation rate for this group reached a low of 10.7 percent for three nonconsecutive quarters from 1985 to 1987, before it began to increase. This upward trend continued during both the Great Recession and the economic expansion that followed. The labor force participation rate for workers age 65 and over reached 20.5 percent in the fourth quarter of 2019, the highest rate since 1961.

The labor force participation rate for people in the prime working age of 25 to 54 was 82.8 percent in 2019. The number of employed people in this age group increased by 753,000, and their unemployment rate decreased by 0.2 percentage point, to 3.0 percent. For 25- to 54-year-olds, the jobless rates edged down over the year to 2.9 percent for men and changed little for women (3.1 percent).

For women in the prime-working-age group, the labor force participation rate rose by 0.9 percentage point, to 76.6 percent in the fourth quarter of 2019, and the employment–population ratio increased by 1.1 percentage points, to 74.3 percent. For prime-working-age men, these indicators were little changed.

The unemployment rate for young adults (age 20 to 24) decreased by 0.6 percentage point, to 6.3 percent. For teenagers (age 16 to 19), the unemployment rate was little changed over the year, at 12.3 percent, almost twice the rate for young adults. (See table 2.)

The labor force participation rate for people age 16 to 24 was 56.0 percent in the fourth quarter of 2019, an increase of 0.9 percentage point from a year earlier. Much of this increase was among 20- to 24-year-olds. Overall, employment among younger workers (those age 16 to 24) increased by 307,000 in 2019, and their employment–population ratio rose by 1.1 percentage points, to 51.5 percent.

Unemployment rates decreased for workers with less education

Among workers age 25 and over, unemployment rates tend to be lower for people with more education.⁶ The unemployment rate for people with a bachelor’s degree and higher was 2.0 percent in the fourth quarter of 2019, less than half the unemployment rate for people with less than a high school diploma (5.3 percent).

The unemployment rate for those with some college or associate’s degree declined by 0.4 percentage point, to 2.8 percent in the fourth quarter of 2019, representing the lowest level since the first quarter of 2001, when it was also 2.8 percent. The jobless rate for people with less than a high school diploma reached a series low of 5.1 percent in the third quarter of 2019, but the rate changed little in the fourth quarter. The unemployment rates for high school graduates, no college (3.7 percent), and for those with a bachelor’s degree and higher (2.0 percent) were little changed, compared with the previous year. (See table 4 and figure 4.)

Number of job leavers trended up, while long-term unemployment edged down

There were 5.8 million people classified as unemployed in the fourth quarter of 2019. Unemployed people are grouped by their reasons for unemployment. People are currently unemployed because they either (1) were on temporary layoff, permanently lost their job, or completed a temporary job (referred to as job losers); (2) voluntarily left their job (job leavers); (3) reentered the labor force (reentrants); or (4) entered the labor force for the first time (new entrants).

The number of unemployed people who lost their job or who completed temporary jobs was 2.7 million in the fourth quarter of 2019. This data series reached a peak of 9.8 million in the fourth quarter of 2009 and steadily declined throughout the economic expansion. The last time there were fewer unemployed people because of job losses or completion of temporary jobs was in the fourth quarter of 2000, when there were 2.5 million people in this category. The number of reentrants—unemployed people who previously worked but were out of the labor force before they began their job search—decreased by 258,000 over the year, to 1.7 million in the fourth quarter. The number of job leavers (people who voluntarily left their job) was 817,000 in the fourth quarter of 2019, and the number of new entrants was 585,000. (See table 5 and figure 5.)

The number of people experiencing long-term unemployment (those who had been looking for work for 27 weeks or longer) edged down by 91,000 in 2019. In the fourth quarter of 2019, 1.2 million people were long-term unemployed, representing 20.9 percent of the total unemployed. The proportion of long-term unemployed remained higher than it was before the 2007–09 recession (17.8 percent in the third quarter of 2007), but it was much lower in 2019 than it had been during the recession. This proportion peaked at 45.1 percent in the second quarter of 2010. The proportion of people unemployed for even longer periods (52 weeks or more) also remained higher than before the recession. In the fourth quarter of 2019, 12.8 percent of the unemployed had been looking for work for 52 weeks or longer, and 5.2 percent had searched for a job for 99 weeks or longer. Before the recession, the percentage of the unemployed who had been looking for work for 52 weeks or longer was 9.9 percent, and those who had been looking for 99 weeks or longer was 3.3 percent. These measures reached peaks of 31.9 percent and 15.1 percent, respectively, in 2011. (Data for those unemployed for 52 weeks or longer and 99 weeks or longer are not seasonally adjusted.) (See figure 6.)

The number of involuntary part-time workers decreased

People who work part time for economic reasons, often referred to as involuntary part-time workers, are those who worked for less than 35 hours per week but would have preferred full-time employment.⁷ They worked a reduced number of hours because of unfavorable business conditions (slack work), or else they worked part time because they could not find a full-time job. Involuntary part-time workers are often described as underemployed.⁸ (See figure 7.)

Over the year, the number of involuntary part-time workers decreased by 391,000, to 4.3 million in the fourth quarter of 2019, representing 2.7 percent of total employment. During the 2007–09recession, the share of involuntary part-time workers increased, reaching a peak of 6.6 percent in the fourth quarter of 2009; but in 2019, the share fell to below its prerecession level. The percentage of involuntary part-time workers had not been lower since the second quarter of 2001. The number of people who could only find part-time work declined by 247,000, to 1.3 million in 2019, while the number of involuntary part-time workers because of slack work or business conditions declined by 193,000, to 2.7 million.

Employment increased and unemployment rates decreased for the major occupational groups

Unemployment rates declined for service occupations; natural resources, construction and maintenance occupations; and management, professional, and related occupations in 2019. The rates for sales and office occupations and production, transportation, and material moving occupations changed little over the year.⁹ The jobless rate for service occupations was 4.4 percent, 0.4 percentage point lower than in 2018. The rate for natural resources, construction, and maintenance occupations was 4.7 percent, which also was a decline of 0.4 percentage point. The rate for management, professional, and related occupations was 2.0 percent. This was the lowest unemployment rate among the five major occupational categories. (See table 6.)

Employment expanded by 2.9 percent in management, professional, and related occupations; this occupation group accounted for 40.8 percent of total employment in 2019. In fact, employment growth from 2018 to 2019 in management, professional, and related occupations accounted for nearly all of the increase in total employment. (See table 7.)

Unemployment rate for veterans unchanged over the year

There were 18.7 million veterans in the civilian noninstitutional population in the fourth quarter of 2019. Nearly half of these veterans were in the labor force. Veterans who served during World War II, the Korean War, and the Vietnam era account for the largest share of the veteran population, at 7.1 million, followed by veterans who served during Gulf War-era II (4.4 million), and those who served during Gulf War-era I (3.1 million). Among veterans, women accounted for about 10 percent of the total veteran population in the fourth quarter of 2019.

In the fourth quarter of 2019, the unemployment rate (not seasonally adjusted) for veterans was 3.1 percent, about unchanged from the previous year. The unemployment rate for nonveterans decreased by 0.3 percentage point over the year, to 3.2 percent.¹⁰ The jobless rate for Gulf War-era II veterans (those who served from September 2001 to the present), at 3.8 percent, was little different from a year earlier. The unemployment rates for male (2.9 percent) and female (4.2 percent) veterans were little changed in the fourth quarter of 2019, compared with the 2018 rates. (See table 8.)