Monthly Labor Review March 2005 3

Household Survey Employment

Household survey indicators

show some improvement in 2004

Fewer workers were unemployed in 2004 and employment rose

over the year; however, Current Population Survey data

indicate that the labor market recovery since the 2001

recession has differed from recoveries in other

postrecession periods

Teresa L. Morisi

Teresa L. Morisi is

an economist in

the Office of

Employment

and Unemployment Statistics,

Bureau of Labor

Statistics. E-mail:

morisi.teri@bls.gov

U

nemployment declined, and employment,

as measured by the Current Population

Survey (CPS), rose in 2004. Reflecting

moderate employment growth, the employment-topopulation ratio edged up, while the labor force

participation rate was little changed over the year.

The end of 2004 marked nearly 4 years since the

beginning of the 2001 recession. Like many other

economic indicators, most major household survey

indicators showed very different patterns over this

period, compared with the average for prior recession and recovery periods.1

 (See box on page 4 for

an explanation of the CPS.)

The unemployment rate and the number of

unemployed persons fell in 2004. Most of the major

demographic groups shared in the decline. The labor

force participation rate held about steady, and the

employment-to-population ratio edged up. The

overall unemployment rate was 5.4 percent in the

fourth quarter of 2004, 0.5 percentage point lower than

in the same quarter of 2003. The jobless rate was 6.1

percent in the third quarter of 2003; by the first quarter

of 2004, it was down to 5.6 percent. The rate edged

down to 5.4 percent in the fourth quarter of 2004. (See

chart 1.) The number of unemployed persons, 8.0

million in that quarter, was down by about 500,000

from the final quarter of 2003. (See table 1.)

The civilian labor force aged 16 and older (the

sum of employed persons plus unemployed persons) grew by 1.7 million in 2004. Labor force growth

just about kept pace with population growth over

the year. The number of employed persons, as

measured by the CPS, increased by 2.2 million from

the fourth quarter of 2003 to the fourth quarter of

2004, a slightly faster growth rate than that for the

16-and-older population.

Reflecting the modest expansion in the labor

force, the labor force participation rate for all workers, at 66.0 percent in the fourth quarter of 2004,

was little changed from the fourth quarter of 2003

(66.1 percent). The labor force participation rate is

the proportion of the civilian noninstitutional

population aged 16 and older who participate in the

labor force. The leveling off of the participation rate

in 2004 was an improvement over the downward

trend that occurred from the start of the latest

recession in the first quarter of 2001 through the

end of 2003. The rate reached its most recent high,

67.2 percent, in the first quarter of 2001, before

declining to 66.1 percent by the fourth quarter of

2003. (See chart 2.)

The employment-to-population ratio, or the

percent of the civilian noninstitutional population

aged 16 and older who are employed, edged up by

0.2 percentage point in the second half of 2004, to
4 Monthly Labor Review March 2005

Household Survey Employment

The Current Population Survey (CPS) is a monthly survey

of about 60,000 households conducted by the U.S. Census

Bureau for the Bureau of Labor Statistics (BLS). The CPS

provides data on the labor force status (employed,

unemployed, or not in the labor force) of the civilian

noninstitutional population aged 16 years and older and

includes information on detailed demographic characteristics, such as gender, age, race, and ethnicity. Interviewers

from the Census Bureau contact households and ask

questions regarding the labor force status of members of

the household during the calendar week that includes the

12th day of the month. The CPS encompasses not only wage

and salary workers (including the incorporated selfemployed), but also the unincorporated self-employed,

farmworkers, unpaid family workers, persons employed by

private households, and workers temporarily absent from

their jobs without pay.

The CPS and the BLS Current Employment Statistics (CES)

survey are both designed to measure employment in the United

States. CPS data differ in scope from CES data. The CES survey

is an employer-based survey that provides data on the number

of payroll jobs in the nonfarm sector, while the CPS is a

household survey that provides information on the labor force

status of persons aged 16 years and older. The two surveys

differ in coverage of workers, reference periods, sampling,

estimation procedures, and concepts. Both surveys are obtained independently and largely complement each other. CPS

data also are different from data derived from the BLS Job

Openings and Labor Turnover Survey (JOLTS), which is an

employer-based survey that provides detailed information on

job openings, hires, and separations.

Beginning with the release of data for January 2003, a

number of changes affected estimates from the CPS. These

changes were undertaken (1) to benchmark the survey data

to more current estimates of the U.S. population, (2) to adopt

new standards for data on race, ethnicity, industry, and

occupation, and (3) to improve seasonal adjustment procedures. The population benchmark created a break in the

CPS employment series between December 2002 and January 2003. In January 2004, the population controls were

updated to reflect revised estimates of international

migration for 2000 through 2003. When trend analyses are

presented in the text of this article, data are adjusted where

possible to control for the changes introduced in January

2003 and January 2004. The method used to “smooth” the

employment series is discussed in Marisa Di Natale,

“Creating Comparability in CPS Employment Series” (on the

Internet at http://www.bls.gov/cps/cpscomp.pdf).

Although the CPS is a monthly survey, quarterly

averages are analyzed throughout this article, and overthe-year changes are based on comparisons of fourthquarter data, unless otherwise noted.

62.4 percent at year’s end. The ratio declined by 2.2

percentage points from the first quarter of 2001 to the third

quarter of 2003 and then showed little definitive change until

mid-2004. (See chart 2.)

Labor force participation by adult men (those aged 20 and

older) decreased slightly in 2004, to 75.7 percent, while

participation by adult women was little changed at 60.3

percent. Employment of men increased by 1.2 million in 2004,

compared with a gain of about 900,000 for women. Men saw

greater improvement in their jobless rate during the year,

although the rate was slightly above that of women at year’s

end. The unemployment rate for adult men fell by 0.6 percentage point in 2004, to 4.9 percent, while the rate for adult

women declined by 0.4 percentage point, to 4.7 percent. (See

table 1.)

Among the major racial and ethnic groups, Hispanics

experienced the sharpest increases in labor force and employment. Although Hispanics made up about 13 percent of

total employment in the fourth quarter of 2003, the increase in

their employment in 2004 accounted for nearly half of the

over-the-year gain in total household survey employment.

The employment gain among Hispanics (who can be of any

race) elevated the group’s labor force participation rate and

employment-to-population ratio. Labor force participation

among Hispanics last peaked in the first quarter of 2001, at

70.1 percent. The rate then trended downward to 67.9 percent

by the fourth quarter of 2003 and was 68.5 percent by the

fourth quarter of 2004. The employment-to-population ratio

for Hispanics increased by 0.9 percentage point in 2004, to

63.9 percent, while their unemployment rate edged down to

6.7 percent. (See table 1.)

In 2004, there was little change in labor force participation

for whites, and their employment-to-population ratio edged

up. The unemployment rate for whites declined by 0.5 percentage point over the year, to 4.6 percent. Blacks saw little

change in their rate of labor force participation or in their

employment-population ratio in 2004. The jobless rate for

blacks, at 10.8 percent in the fourth quarter of 2004, was about

the same as a year earlier and remained more than twice the

rate for whites. (See table 1.)

Among teenagers, the pattern of declines in labor force

participation and in the employment-population ratio that had

been going on since near the onset of the last recession did

not continue into 2004.2 From the most recent high point of

52.6 percent in the second quarter of 2000, the participation

rate for teens fell steadily to a low of 43.5 percent in the fourth
Monthly Labor Review March 2005 5

1969 1974 1979 1984 1989 1994 1999 2004

0

2

4

6

8

10

12

0

2

4

6

8

10

12

Chart 1. Unemployment rate, seasonally adjusted quarterly data, 1969–2004

Percent

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Percent

I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV

60

62

64

66

68

70

60

62

64

66

68

70

Chart 2. Labor force participation rate and employment-population ratio, seasonally 

adjusted quarterly data, 1998–2004

Percent

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Percent

Labor force participation rate

Employment-to-population ratio

1998 1999 2000 2001 2002 2003 2004
6 Monthly Labor Review March 2005

Household Survey Employment

quarter of 2003, stabilized, and then increased slightly to 44.1

percent at the end of 2004. The employment-to-population

ratio for teens was about unchanged in 2004, at 36.6 percent,

after declining steadily from 46.0 percent since the second

quarter of 2000. The teen unemployment rate increased

slightly in 2004, to 17.1 percent at year’s end. (See table 1.)

One factor related to teen participation in the labor force is

the group’s enrollment in school. Chart 3 shows an inverse

relationship between teen labor force participation and school

enrollment; that is, when the percentage of teens enrolled in

school goes up, the teen labor force participation rate tends

to go down, and vice versa. In October 2004, the percentage

of teens enrolled in school was down slightly from a year

earlier, at 80.6 percent, and the labor force participation rate

for teens was up slightly, to 42.5 percent.3 Despite the downward tick in the percentage of teens enrolled in October 2004,

the proportion of teens enrolled generally has been on an

upward trend in recent years, and the increase has been

among older teens aged 18–19 years. CPS data from an annual

October supplement to the survey show that 16- to 17-yearolds have maintained their high percentage of enrollment;

enrollment rates for 18- to 19-year-olds have increased

because more of them are attending college. In October 1985,

52 percent of 18- to 19-year-olds were enrolled in school; by

October 2004, the proportion was 65 percent.

Labor force participation among young adults (aged 20–

24 years) increased slightly in 2004 after declining from the

beginning of the 2001 recession through late 2003 (although

the decline was not as steep as it was for teenagers). The

participation rate of 20- to 24-year-olds fell to 74.9 percent in

the fourth quarter of 2003 from its most recent high point of

78.2 percent in the first quarter of 2001. In 2004, labor force

participation for the group edged up to 75.3 percent. The

employment-population ratio for young adults also was up

in 2004, after being on a downward trend since the first quarter

of 2001. As with teens, young adults’ labor force participation

moved somewhat inversely to school enrollment. Over the

long term, the proportion of 20- to 24-year-olds enrolled in

school grew from 24 percent in October 1985 to 35 percent in

October 2004.

Adults in the next-older age groups (ages 25–34 years

and 35–44 years) also saw little change in their participation

rates in 2004 after several years of declining participation.

The employment-to-population ratios for these age groups

were up in 2004, reversing a pattern of declines over the past

few years. The labor force participation rate declined and the

employment-to-population ratio edged down over the year

among those persons aged 45 to 54 years.

CPS data from the survey’s Annual Social and Economic

Supplement provide some insight into the reasons some

adults aged 25–54 years are not in the labor force.4 Questions

are asked of those persons who did not work or look for work

at any time in the previous calendar year. In 2003, less than 50

percent of persons aged 25 to 54 years cited “home responsibilities” as a reason they did not work or seek work, down

from 56 percent in 1993. The decline occurred entirely among

women, as the proportion of women citing this reason fell

from 72 percent in 1993 to 65 percent in 2003, while the

proportion of men citing the same reason increased slightly.

More 25- to 54-year-olds cited “ill or disabled” or “retired” in

2003 than did 10 years earlier; the proportion for men was

lower, while the proportion for women was higher. About the

same proportion—8 percent—of persons aged 25–54 years

not working or looking for work gave the reason “going to

school” in 2003 as did in 1993.

Among persons aged 55 years and older, the labor force

participation rate continued to trend upward in 2004, to 36.5

percent in the fourth quarter, compared with 36.0 percent a

year earlier. Labor force participation among this group has

been increasing since the third quarter of 1993. The proportion

of older persons who held jobs also rose in 2004. In the fourth

quarter of 2004, 35.1 percent of those 55 years and older were

employed—a figure that was 7.1 percentage points higher

than in the third quarter of 1993, the most recent low point in

the employment-population ratio for this group. These trends

run counter to those displayed by other age groups. In fact,

the participation rate and employment-to-population ratio for

older workers continued to rise during the 2001 recession,

while moving down for the younger age groups.

The concept of retirement has been changing among older

workers. Older persons are healthier and living longer, and

many wish to remain attached to the labor force in some way.

The proportion of older workers who usually work full time

has been increasing. In 2004, 77 percent of workers aged 55

years and older usually worked full time (35 hours or more),

up from 72 percent in 1994.

Changes in Social Security laws have served to make work

at older ages more attractive. The amount of earnings that a

worker could earn without losing Social Security benefits

gradually increased over the years as various provisions of

the earnings limit law were modified. By 2000, the “earnings

test” was eliminated for workers who reached the “full,” or

“normal,” retirement age for receiving unreduced Social

Security benefits. The year 2000 also saw an increase in that

age: prior to 2000, the full retirement age was 65 years;

beginning in 2000, the age increased to 65 years and 2 months

for workers who were born in 1938. The full retirement age

will rise gradually until the year 2022, when it will be 67 years.5

The CPS does collect some information on persons who

work and receive pensions. Data on individuals who received

a pension in the previous year and worked during the month

of March in the next year are available from the survey’s

Annual Social and Economic supplement. The proportion of

workers aged 65 and older who worked in March and received
Monthly Labor Review March 2005 7

Table 1. Employment status of the civilian noninstitutional population 16 years and older, by selected characteristics,

 quarterly averages, seasonally adjusted, 2001–04

[In thousands]

2004

 Quarter Quarter Quarter

 Characteristic IV, 2001 IV, 2002 IV, 2003

Quarter Quarter Quarter Quarter

I II III IV

 Total

Civilian labor force .................. 144,222 145,170 146,898 146,684 147,064 147,677 148,136 1,238 1,576

Participation rate ................. 66.7 66.4 66.1 66.0 66.0 66.0 66.0 –.1 ...

Employed ............................. 136,222 136,642 138,296 138,296 138,408 138,883 140,092 1,796 2,196

Employment-population ratio . 63.0 62.5 62.2 62.2 62.3 62.4 62.4 .2 ...

Unemployed ......................... 8,000 8,528 8,602 8,276 8,181 8,069 8,044 –558 –533

Unemployment rate .............. 5.5 5.9 5.9 5.6 5.6 5.5 5.4 –.5 ...

............................................

 Men, 20 years and older

Civilian labor force .................. 73,185 73,771 75,054 75,010 75,122 75,548 75,751 697 857

Participation rate ................. 76.5 76.0 76.0 75.8 75.7 75.8 75.7 –.3 ...

Employed ............................. 69,537 69,715 70,923 71,152 71,320 71,793 72,016 1,093 1,245

Employment-population ratio . 72.7 71.9 71.8 71.9 71.8 72.0 72.0 .2 ...

Unemployed ......................... 3,648 4,056 4,131 3,858 3,802 3,755 3,734 –397 –388

Unemployment rate .............. 5.0 5.5 5.5 5.1 5.1 5.0 4.9 –.6 ...

............................................

 Women, 20 years and older

Civilian labor force .................. 63,231 63,950 64,811 64,611 64,856 65,000 65,210 399 652

Participation rate ................. 60.6 60.6 60.4 60.3 60.3 60.3 60.3 –.1 ...

Employed. ............................ 60,149 60,694 61,488 61,372 61,681 61,906 62,126 638 878

Employment-population ratio . 57.6 57.5 57.3 57.2 57.4 57.4 57.5 .2 ...

Unemployed ......................... 3,082 3,256 3,323 3,239 3,175 3,095 3,084 –239 –226

Unemployment rate .............. 4.9 5.1 5.1 5.0 4.9 4.8 4.7 –.4 ...

............................................

 Both sexes, 16 to 19 years

Civilian labor force .................. 7,806 7,449 7,033 7,063 7,086 7,128 7,175 142 152

Participation rate ................. 48.8 46.7 43.5 43.7 43.7 43.9 44.1 .6 ...

Employed ............................. 6,536 6,233 5,885 5,883 5,882 5,909 5,949 64 72

Employment-population ratio . 40.9 39.1 36.4 36.4 36.3 36.4 36.6 .2 ...

Unemployed ......................... 1,270 1,215 1,148 1,179 1,205 1,219 1,226 78 80

Unemployment rate .............. 16.3 16.3 16.3 16.7 17.0 17.1 17.1 .8

 White

Civilian labor force .................. 119,773 120,196 120,781 120,644 120,974 121,219 121,463 682 1,031

Participation rate ................. 67.0 66.6 66.4 66.4 66.3 66.3 66.3 –.1 ...

Employed ............................. 13,885 114,012 114,603 114,626 114,994 115,485 115,831 1,228 1,559

Employment-population ratio . 63.7 63.2 63.0 63.0 63.0 63.2 63.2 .2 ...

Unemployed ......................... 5,888 6,184 6,178 6,015 5,979 5,734 5,632 –546 –528

Unemployment rate .............. 4.9 5.1 5.1 5.0 4.9 4.7 4.6 –.5 ...

............................................

 Black or African-American

Civilian labor force .................. 16,421 16,604 16,469 16,544 16,502 16,736 16,754 285 317

Participation rate ................. 64.9 64.5 63.7 63.9 63.5 64.1 63.9 .2 ...

Employed ............................. 14,816 14,843 14,724 14,874 14,852 14,963 14,944 220 248

Employment-population ratio . 58.5 57.6 56.9 57.4 57.1 57.3 57.0 .1 ...

Unemployed ......................... 1,604 1,760 1,744 1,671 1,650 1,773 1,810 66 69

Unemployment rate .............. 9.8 10.6 10.6 10.1 10.0 10.6 10.8 .2 ...

............................................

 Hispanic or Latino ethnicity

Civilian labor force .................. 17,592 18,132 19,013 18,862 19,227 19,446 19,540 527 1,190

Participation rate ................. 69.4 68.8 67.9 68.1 68.7 68.9 68.5 .6 ...

Employed ............................. 16,286 16,701 17,657 17,475 17,889 18,103 18,235 578 988

Employment-population ratio . 64.3 63.4 63.0 63.1 64.0 64.1 63.9 .9 ...

Unemployed ......................... 1,306 1,431 1,356 1,388 1,328 1,344 1,305 –51 202

Unemployment rate .............. 7.4 7.9 7.1 7.4 6.9 6.9 6.7 –.4 ...

See footnote at end of table.

Change,

quarter IV,

2003, to

quarter IV,

20041

Change

adjusted

for

population

revisions
8 Monthly Labor Review March 2005

Household Survey Employment

a pension the previous year was 10 percent in 1994. In 2000,

the first year that the elimination of the earnings test took

effect, the proportion was 11 percent, and it increased to 13

percent in 2004.

Studies also indicate that persons with more education

tend to work to older retirement ages.6 CPS data show that the

proportion of the population aged 55 years and older with a

college degree increased from 15 percent in 1994 to 23 percent

in 2004. Accordingly, successive population cohorts are

arriving at older ages with higher educational attainment than

their predecessors, and the shift in educational attainment

alone provided a gradual boost to overall participation rates.

Fewer unemployed persons were permanent job losers, and

the number of long-term unemployed declined over the year.

The number of unemployed persons declined by about half a

million from the fourth quarter of 2003 to the fourth quarter of

2004. Virtually the entire decline in unemployment was in the

category “job losers not on temporary layoff.” These are

persons who involuntarily lost their jobs permanently and

had begun to look for work. Job losers not on layoff accounted for 39 percent of the unemployed in the fourth quarter of

2004, down from 42 percent in the fourth quarter of 2003. In

contrast, the share of unemployed persons who voluntarily

left their jobs increased slightly, from 10 percent in the fourth

quarter of 2003 to 11 percent in the fourth quarter of 2004.

Reentrants to the labor force constituted 30 percent of the

unemployed in the fourth quarter of 2004, up slightly from 28

percent in the fourth quarter of 2003. The proportion of new

entrants increased over the year from 8 percent in the fourth

quarter of 2003 to 9 percent in the fourth quarter of 2004. (See

table 2.)

The number of persons unemployed for 15 or more weeks

fell by about 400,000 in 2004, to a level of 3.0 million. About 60

percent of this decline was among persons unemployed 27 or

more weeks—the long-term unemployed. In addition, the

number of persons unemployed for 5–14 weeks fell by roughly

200,000. The percentage of the jobless who were unemployed

27 or more weeks, 21 percent in the fourth quarter of 2004,

was down from the fourth quarter of 2003, but was still higher

than the lows seen during the last recovery. The average

(mean) duration of unemployment was little changed in 2004,

and the median number of weeks unemployed was down to

9.6 weeks from 10.4 weeks a year earlier. (See table 2.)

Fewer persons worked part time for economic reasons in 2004.

These persons are often thought of as “underemployed.” The

number of persons holding more than one job grew over the

year. The number of workers who work part time involuntarily, also known as those employed part time for economic

reasons, declined in 2004, to a level of 4.6 million. Involuntary

part-time workers include those who want a full-time job, but

who could not work full time due to slack work or business

conditions or because they were unable to find full-time work.

The number of involuntary part-time workers was 3.3 million

in the first quarter of 2001, when the recession began, and

increased to 4.8 million by the fourth quarter of 2003. The

entire decline in 2004 (–200,000) occurred among persons

working part time due to slack work or business conditions.

(See chart 4.)

The number of multiple jobholders was 7.8 million in the

fourth quarter of 2004. The percentage of the employed who

held more than one job edged up from 5.3 percent in the fourth

quarter of 2003 to 5.6 percent in the fourth quarter of 2004. Most

of the gain was among persons who held a primary job full time

and a secondary job part time. (See table 3.)

The year 2004 saw an increase in the number of persons

who were out of the labor force, but who indicated that they

wanted a job. However, among this group, there was little

change in the number who were marginally attached to the

labor force or who were in a subset of this group known as

discouraged workers. The alternative measures of labor

underutilization showed improvement in 2004. The labor

force is composed of persons aged 16 and older who are

employed, plus those 16 years and older who are unemployed.

Persons who are neither employed nor unemployed fall into

the category “not in the labor force.” Some of these persons

indicate that they want a job, although they are not currently

looking for one. The number of such workers increased by

about 130,000 in 2004, to a level of 4.9 million.7 Among the

group of people who want a job, but are not currently

engaged in any active job search, some have looked for a job

at some point during the year prior to the survey and would

Table 1. Continued—Employment status of the civilian noninstitutional population 16 years and older, by selected

 characteristics, quarterly averages, seasonally adjusted, 2001–04

 1 Data in this column may differ from data in the text because the data

in the text were “smoothed” to adjust for revisions to population controls in

January 2004. The technique used to smooth these series is discussed in

Marisa Di Natale, “Creating Comparability in CPS Employment Series,”

unpublished paper on the Internet at http://www.bls.gov/cps/cpscomp.pdf,

December 2003.

NOTE: Beginning in 2003, data reflect revised population controls. Detail

for race and Hispanic-origin groups will not sum to totals because data for

the “other races” group are not presented and Hispanics are included in both

the white and black population groups.

SOURCE: Bureau of Labor Statistics, Current Population Survey.
Monthly Labor Review March 2005 9

Chart 3. School enrollment rates and labor force participation rates for teens, October

 1985–October 2004

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

60

65

70

75

80

85

90

35

40

45

50

55

60

65

Labor force 

participation 

rate

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Percent 

enrolled In 

school

Percent of teens enrolled

Teen labor force participation rate

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

Chart 4. Persons employed part time for economic reasons, seasonally adjusted 

 quarterly data, 1970–2004 

Thousands

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Beginning in 

1994, data are affected by the redesign of the Current Population Survey and are not strictly comparable to data for previous 

years.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Thousands
10 Monthly Labor Review March 2005

Household Survey Employment

be available to take a job if one were offered to them. These

individuals, referred to as “marginally attached workers,”

totaled 1.6 million in 2004, a figure little changed from a year

earlier. Discouraged workers, a subgroup of the marginally

attached, are persons who have specifically given up searching for work because they feel that no jobs are available for

them. The number of discouraged workers was 466,000 in

2004, also little changed from a year earlier. The number of

discouraged workers in 2004 remained above the levels that

existed prior to the 2001 recession. (See table 4.)

Each month, a number of alternative unemployment

indicators that supplement the official jobless rate are

produced from the CPS data. Known as U-1 through U-6, the

various measures of unemployment (U-3 is the official

unemployment rate, while the others are the alternative rates)

afford insight into the degree to which labor resources are

underutilized. Alternative measures U-4 through U-6 include

a broader group of persons who are underutilized in the labor

market than is captured by the official unemployment rate, U-3.

U-4 adds discouraged workers to U-3, U-5 adds all other

marginally attached workers to U-4, and U-6 augments U-5

by adding persons employed part time for economic reasons.

Like U-3, the alternative measures began to move downward

after reaching a high point in the third quarter of 2003, and

they continued declining through 2004. (See table 5.)

For wage and salary workers, service occupations showed

strong employment growth in 2004, followed by

management, professional and related occupations, and

construction and extraction occupations. Employment in

production occupations and in sales and related occupations declined over the year. Among occupations, the

largest gain in employment in 2004 for wage and salary

workers, 1.3 million, occurred in the service occupations—a

gain of about a half million in personal care and service

occupations and gains of about 360,000 in food preparation

 Reason for unemployment

Level:

 Job losers and persons

 who completed temporary

 jobs ............................................ 4,430 4,761 4,703 4,380 4,210 4,073 4,083 –620

 On temporary layoff .................... 1,214 1,103 1,073 1,042 974 986 951 –122

 Not on temporary layoff ............... 3,217 3,658 3,630 3,338 3,236 3,087 3,132 –498

 Job leavers .................................... 876 843 830 829 866 871 869 39

 Reentrants ..................................... 2,242 2,418 2,448 2,451 2,391 2,397 2,387 –61

 New entrants ................................. 498 539 648 659 672 694 726 78

......................................................

Percent distribution: ..........................

 Job losers and persons ...................

 who completed temporary ..............

 jobs ............................................ 55.1 55.6 54.5 52.6 51.7 50.7 50.6 –3.9

 On temporary layoff .................... 15.1 12.9 12.4 12.5 12.0 12.3 11.8 –.6

 Not on temporary layoff ............... 40.0 42.7 42.1 40.1 39.8 38.4 38.8 –3.3

 Job leavers .................................... 10.9 9.8 9.6 10.0 10.6 10.8 10.8 1.2

 Reentrants ..................................... 27.9 28.2 28.4 29.5 29.4 29.8 29.6 1.2

 New entrants ................................. 6.2 6.3 7.5 7.9 8.3 8.6 9.0 1.5

......................................................

 Duration of unemployment .......

......................................................

Less than 5 weeks ........................... 3,074 2,854 2,654 2,565 2,739 2,735 2,743 89

5 to 14 weeks .................................. 2,629 2,538 2,523 2,412 2,381 2,410 2,305 –218

15 or more weeks ............................. 2,290 3,144 3,429 3,304 3,022 2,927 3,002 –427

 15 to 26 weeks. ............................. 1,242 1,374 1,468 1,386 1,245 1,223 1,293 –175

 27 or more weeks ........................... 1,047 1,770 1,961 1,918 1,777 1,704 1,708 –253

......................................................

Average (mean) duration, ..................

 in weeks ........................................ 14.0 18.0 19.7 20.0 19.8 19.1 19.6 –.1

......................................................

Median duration, in weeks ................. 7.7 9.5 10.4 10.4 10.0 9.3 9.6 –.8

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Table 2. Unemployed persons, by reason for and duration of unemployment, quarterly averages, seasonally adjusted,

 2001–04Table 1

[In thousands]

2004

Quarter Quarter Quarter

 Reason and duration IV, 2001 IV, 2002 IV, 2003

Quarter Quarter Quarter Quarter

I II III IV

Change,

quarter IV,

2003, to

quarter IV,

2004
Monthly Labor Review March 2005 11

and 390,000 in building and grounds cleaning and maintenance. Employment increased by about 900,000 over the

year in management, professional, and related occupations.

Most of this gain came in the management, business, and

financial operations occupations component. Employment in

construction occupations increased by about 400,000 over

the year.

In 2004, the largest employment decline among wage and

salary workers, about 400,000, occurred in production occupations. Employment in sales and related occupations fell by

about 300,000 over the year.

Employment among men aged 16 and older increased by

1.1 million in 2004, and employment among women in the

same age group grew by about 670,000. The share of the total

increase in employment attributable to men, 63 percent, was

higher than their share of employment, 53 percent. The

number of men employed in service occupations grew by

about 750,000, and the number in management, professional,

and related occupations rose by 713,000. Within the broad

category of management, professional, and related occupations, an additional 305,000 men were employed in management, business, and financial operations occupations, and

408,000 were added in professional and related occupations.

The number of women employed in service occupations grew

by about 550,000 in 2004. Employment of women increased

by about 300,000 in the management, business, and financial

occupations category, about the same gain as among men in

that category, while the number of women employed in

professional and related occupations edged down. In the

traditionally male-dominated construction and extraction

occupational category, nearly all of the increase occurred

among men.

The decline in employment among men and women in

production occupations was proportionate to their shares of

Table 3. Multiple jobholders, quarterly averages, not seasonally adjusted, 2001–04

[In thousands]

 2004

Quarter Quarter Quarter

IV, 2001 IV, 2002 IV, 2003 Quarter Quarter Quarter Quarter

 I II III IV

Multiple jobholders1

Multiple jobholders ........................................ 7,221 7,410 7,359 7,245 7,286 7,520 7,839 480

Percent of employed ..................................... 5.3 5.4 5.3 5.3 5.2 5.4 5.6 .3

..................................................................

 Primary job full time, secondary part time .... 3,895 3,954 3,813 3,785 3,816 3,904 4,126 313

 Primary and secondary jobs both part time .. 1,579 1,694 1,719 1,715 1,632 1,636 1,728 9

 Primary and secondary jobs both full time ... 255 238 244 277 286 298 284 40

 Hours vary on primary or secondary job ...... 1,453 1,481 1,541 1,435 1,519 1,637 1,665 124

Table 4. Persons not in the labor force, annual averages, not seasonally adjusted, 2001–04

[In thousands]

2001 2002 2003 2004

 Total not in the labor force................................. 71,359 72,707 74,658 75,956 1,298

 Persons who currently want a job ............................. 4,590 4,677 4,726 4,852 126

 Marginally attached ............................................. 1,266 1,439 1,531 1,574 43

 Reasons not currently looking:

 Discouragement over job prospects ................. 321 369 457 466 9

 Reasons other than discouragement ................ 945 1,070 1,075 1,108 33

1 Persons who have searched for work during the previous 12 months

and were available to take a job during the reference week.

2 Includes those who believed that no work was available for them, those

who could not find work, those who lacked schooling or training, those who

believed that their employer would think that they were too young or too old

for a job, and those who thought they faced other types of discrimination.

3 Includes those who did not actively look for work in the previous 4

weeks for reasons such as childcare and transportation problems, as well

as a small number whose reason for nonparticipation was not determined.

 SOURCE: Bureau of Labor Statistics, Current Population Survey.

Change,

quarter IV,

2003, to

quarter IV,

2004

1

Includes persons who work part time on their primary job and full time

on their secondary job(s), not shown separately.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Category

 Category Change, 2003

 to 2004

 1

 2

3
12 Monthly Labor Review March 2005

Household Survey Employment

Chart 6. Labor force participation rates, 12 months prior to and 45 months after the 

 onset of recession

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Index Index

-12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45

94

95

96

97

98

99

100

101

102

103

104

94

95

96

97

98

99

100

101

102

103

104

Months from March 2001 = 0

All earlier recessions except 1980

2001–present

 Chart 5. Women's median usual weekly earnings as a percentage of men's, annual 

 averages,1979–2004

1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

50

55

60

65

70

75

80

85

50

55

60

65

70

75

80

85

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Percent Percent
Monthly Labor Review March 2005 13

employment in the occupational group. In contrast, the entire

decline in sales and related occupations occurred among

men, although their share of total employment in the group

was about half. (See table 6.)

In 2004, 8 percent of employed persons were selfemployed, the vast majority in nonagricultural industries. The

number of nonagricultural self-employed workers edged up

over the year, to 9.6 million. In 2004, 21 percent of nonagricultural self-employed workers worked in the professional

and business services industry and 20 percent in construction—proportions that have been stable in recent years.8

Men accounted for 62 percent of the nonagricultural selfemployed in 2004.

The median weekly earnings of full-time wage and salary

workers rose by 2.9 percent in 2004, slightly better than the

inflation rate as measured by the Consumer Price Index.

Women’s earnings increased more than men’s last year. In

2004, median weekly earnings rose by slightly more than

consumer prices.9 Median usual weekly earnings of full-time

wage and salary workers increased by 2.9 percent in 2004, to

$638, while prices, as measured by the Consumer Price Index

for All Urban Consumers (CPI-U), grew by 2.7 percent. Among

workers in the major occupational groups, those in installation, maintenance, and repair and those in professional and

related occupations saw their earnings rise (4.6 percent and

4.5 percent, respectively) by more than the CPI-U.

Women fared better than men in 2004 in terms of earnings

increases. Women’s earnings rose by 3.8 percent, to $573,

while men’s earnings rose by 2.6 percent, to $713.10 (See table 7.)

In 2004, women’s median usual weekly earnings were 80.4

percent of men’s. The proportion of women’s-to-men’s

earnings has risen by 17.3 percentage points since 1979, the

first year that CPS weekly earnings data became available on a

regular basis.11 (See chart 5.)

With regard to education levels among workers 25 years

and older, the largest percent increase in earnings over the

year was for high school graduates. However, the median

usual weekly wage for high school graduates in 2004 ($533)

was just 56 percent of the median usual weekly earnings of

college graduates ($960). The ratio of high school graduate

to college graduate earnings has been trending downward;

in 1979, high school graduates earned 72 percent of what

college graduates earned. (Note that the comparisons of

earnings in this section are on a broad level and do not control

for many factors that can be significant in explaining earnings

differences.)12

The period during the 2001 recession and that of the

subsequent recovery differ from previous periods with

regard to the labor force participation rate and the

employment-to-population ratio. December 2004 marked

45 months since the onset of the latest recession, which began

in March 2001 and ended in November of that year. The

performance of the labor force participation rate and the

employment-population ratio during the 2001 recession and

the recovery period that followed appears to be quite different

from the average performance of those indicators over earlier

periods. In charts 6 through 8, data points for the 2001

recession are indexed to 100 in March 2001, the start of the

Table 5. Range of alternative measures of labor underutilization, quarterly averages, seasonally adjusted, 2001–04

 2004

 Measure Quarter Quarter Quarter

IV, 2001 IV, 2002 IV, 2003 Quarter Quarter Quarter Quarter

I II III IV

U-1: Persons unemployed 15 or more weeks,

 as a percent of the civilian labor force ............... 1.6 2.2 2.3 2.3 2.1 2.0 2.0 –.3

U-2: Job losers and persons who completed

 temporary jobs, as a percent of the civilian

 labor force ...................................................... 3.1 3.3 3.2 3.0 2.9 2.8 2.8 –.4

U-3: Total unemployed, as a percent of the

civilian labor force (official unemployment rate) ... 5.5 5.9 5.9 5.6 5.6 5.5 5.4 –.5

U-4: Total unemployed plus discouraged

workers, as a percent of the civilian labor force

plus discouraged workers .................................. 5.8 6.1 6.1 5.9 5.9 5.8 5.7 –.4

U-5: Total unemployed, plus discouraged

workers, plus all other marginally attached

workers, as a percent of the civilian labor force

plus all marginally attached workers ................... 6.4 6.8 6.8 6.7 6.5 6.5 6.4 –.4

U-6: Total unemployed, plus all marginally

attached workers, plus total employed part

time for economic reasons, as a percent of

the civilian labor force plus all marginally

attached workers .............................................. 9.4 9.7 10.0 9.8 9.6 9.5 9.5 –.5

SOURCE: Bureau of Labor Statistics, Current Population Survey .

Change,

 quarter IV,

2003, to

 quarter IV,

2004
14 Monthly Labor Review March 2005

Household Survey Employment

 Table 6. Employment by intermediate occupation and sex, fourth quarter, not seasonally adjusted, 2003–04, and

 median usual weekly earnings of full-time wage and salary workers, by occupation, annual average, 2004

Total Men Women

 Occupation Quarter Quarter Quarter Quarter Quarter Quarter

IV, 2003 IV, 2004 IV, 2003 IV, 2004 IV, 2003 IV, 2004

 Total, 16 years and older ............. $638 138,625 140,435 1,810 73,925 75,064 1,139 64,700 65,371 671

.........................................................

Management, professional, and related

 occupations ...................................... 918 48,182 49,063 881 23,756 24,469 713 24,426 24,594 168

 Management, business, and financial

 operations occupations .................. 965 19,725 20,330 605 11,420 11,725 305 8,305 8,606 301

 Management occupations ............. 1,052 14,280 14,518 238 9,007 9,228 221 5,274 5,290 16

 Business and financial operations

 occupations ............................. 847 5,445 5,812 367 2,414 2,496 82 3,031 3,316 285

 Professional and related occupations . 883 28,457 28,733 276 12,336 12,744 408 16,121 15,989 –132

 Computer and mathematical

 occupations .............................. 1,114 3,187 3,279 92 2,233 2,400 167 953 879 –74

 Architecture and engineering

 occupations .............................. 1,098 2,743 2,826 83 2,349 2,465 116 394 360 –34

 Life, physical, and social science

 occupations .............................. 957 1,399 1,394 –5 793 785 –8 606 609 3

 Community and social services

 occupations .............................. 707 2,204 2,109 –95 874 850 –24 1,330 1,258 –72

 Legal occupations ....................... 1,070 1,573 1,524 –49 834 777 –57 739 747 8

 Education, training, and library

 occupations .............................. 781 8,115 8,136 21 2,103 2,220 117 6,012 5,917 –95

 Arts, design, entertainment, sports,

 and media occupations .............. 768 2,625 2,808 183 1,372 1,447 75 1,254 1,362 108

 Health-care practitioner and

 technical occupations ............... 852 6,611 6,657 46 1,779 1,800 21 4,832 4,857 25

.........................................................

Service occupations ............................ 411 21,751 23,058 1,307 9,259 10,011 752 12,491 13,047 556

 Health-care support occupations ....... 407 2,924 2,918 –6 328 303 –25 2,596 2,615 19

Protective service occupations .......... 700 2,862 2,926 64 2,224 2,282 58 638 645 7

 Food preparation and serving-related

 occupations .................................. 360 6,978 7,335 357 2,932 3,245 313 4,046 4,090 44

Building and grounds cleaning and

maintenance occupations ............... 385 4,890 5,277 387 2,873 3,095 222 2,018 2,182 164

 Personal care and service

 occupations .................................. 402 4,097 4,602 505 903 1,086 183 3,194 3,516 322

Sales and office occupations ................ 558 35,765 35,577 –188 13,017 12,657 –360 22,749 22,921 172

 Sales and related occupations .......... 604 16,313 16,011 –302 8,270 7,972 –298 8,044 8,039 –5

 Office and administrative support

occupations .................................. 535 19,452 19,566 114 4,747 4,685 –62 14,705 14,882 177

.........................................................

Natural resources, construction,

and maintenance occupations ............. 621 14,671 14,886 215 13,993 14,210 217 678 676 –2

 Farming, fishing, and forestry

 occupations .................................. 356 1,078 936 –142 853 740 –113 225 196 –29

 Construction and extraction

 occupations .................................. 604 8,355 8,768 413 8,123 8,517 394 232 250 18

 Installation, maintenance,

and repair occupations ................... 704 5,238 5,182 –56 5,017 4,952 –65 221 229 8

.........................................................

Production, transportation, and

 material-moving occupations .............. 523 18,256 17,851 –405 13,900 13,718 –182 4,356 4,133 –223

 Production occupations .................... 526 9,754 9,313 –441 6,740 6,441 –299 3,014 2,871 –143

 Transportation and material-moving

 occupations .................................. 520 8,502 8,539 37 7,160 7,277 117 1,342 1,262 –80

Change,

quarter

IV,

 2003, to

quarter

IV,

2004

Median

usual

weekly

earnings

Change,

quarter

IV,

2003, to

quarter

IV,

2004

Change,

quarter

 IV,

 2003, to

quarter

 IV,

2004

 NOTE: Occupations reflect the introduction into the Current

Population Survey of the 2002 census occupational classification system

derived from the 2000 Standard Occupational Classification system.

Beginning in 2003, data reflect revised population controls. Data may not sum

to totals due to rounding.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

[Employment in thousands]
Monthly Labor Review March 2005 15

recession. The line labeled “all earlier recessions except 1980” is

the average indexed data for the 8 recessions that occurred after

1945 (excluding the short 1980 recession and the 2001 downturn),

for a 57-month period beginning 12 months before, and ending

45 months after, the onset of the recession.13

The labor force participation rate declined during the 2001

recession, instead of remaining relatively stable as it did for

the average of the past recessions. The rate continued to

move downward through the recovery, and by the end of

2004, it remained below what it was at the beginning of the

recession. In contrast, the average of the past recoveries

shows that the labor force participation rate surpassed its

level during the first month of the recession well before the

45th month of the recovery. (See chart 6.) This difference

reflects, in part, an apparent shift in the long-term secular

increase in women’s participation. The rate of women’s labor

force participation nearly doubled, from 32.0 percent when

the series began in January 1948, to 60.2 percent at the onset

of the latest recession in March 2001. The climb in women’s

participation over this period was, at most, just barely

interrupted by recessions. More recently, women’s participation has appeared to be more sensitive to cyclical downturns. In fact, in the 2001 recession and throughout much of

the recovery to date, the rate trended down and, by December

2004, was 59.2 percent.

During both the most recent recovery and the previous

ones (averaged), the employment-population ratio at 45

months into the recovery was well below its level at the

beginning of the recession. In December 2004, however, the

ratio was much lower relative to the average of the other

recoveries at the corresponding point in time. (See chart 7.)

In contrast, the trend for the unemployment rate during the

past year of the current recovery is close to the average trend

for the previous recoveries. The peak in the unemployment

rate, however, came later in the current recovery than it did,

on average, in the previous ones. (See chart 8.)

Table 7. Median usual weekly earnings of full-time wage and salary workers, by selected characteristics, annual

 averages, 2003–04

 Characteristic 2003 2004 Percent change,

 2003–04

 Total, 16 years and older ............................................. $620 638 2.9

 Management, business, and financial operations occupations ....... 961 965 .4

 Professional and related occupations ......................................... 845 883 4.5

 Service occupations ................................................................. 403 411 2.0

 Sales and related occupations ................................................... 598 604 1.0

 Office and administrative support occupations ............................ 523 535 2.3

 Farming, fishing, and forestry occupations ................................. 369 356 –3.5

 Construction and extraction occupations .................................... 599 604 .8

 Installation, maintenance, and repair occupations ........................ 673 704 4.6

 Production occupations ............................................................. 519 526 1.3

 Transportation and material-moving occupations .......................... 520 520 .0

 Men ........................................................................................ 695 713 2.6

 Women ................................................................................... 552 573 3.8

 White ...................................................................................... 636 657 3.3

 Men ..................................................................................... 715 732 2.4

 Women ................................................................................ 567 584 3.0

 Black ...................................................................................... 514 525 2.1

 Men ..................................................................................... 555 569 2.5

 Women ................................................................................ 491 505 2.9

Hispanic origin ......................................................................... 440 456 3.6

 Men ..................................................................................... 464 480 3.4

 Women ................................................................................ 410 419 2.2

Educational attainment:1

 Less than a high school diploma ............................................. 381 384 .8

 High school graduate, no college ............................................ 519 533 2.7

 Some college or associate’s degree ........................................ 604 618 2.3

 Bachelor’s degree or higher .................................................... 940 960 2.1

1 Earnings figures by educational attainment pertain to persons aged 25

and older. SOURCE: Bureau of Labor Statistics, Current Population Survey.

1
16 Monthly Labor Review March 2005

Household Survey Employment

 Chart 7. Employment-population ratio, 12 months prior to and 45 months after the 

 onset of recession

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Index Index

-12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45

94

95

96

97

98

99

100

101

102

103

104

94

95

96

97

98

99

100

101

102

103

104

Months from March 2001 = 0

All earlier recessions except 1980

2001–present

 Chart 8. Unemployment rates, 12 months prior to and 45 months after the onset of recession

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Index Index

-12 -9 -6 -3 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45

0

20

40

60

80

100

120

140

160

180

0

20

40

60

80

100

120

140

160

180

Months from March 2001 = 0

All earlier recessions except 1980

2001–present
Monthly Labor Review March 2005 17

IN SUM, CPS DATA INDICATE THAT THE LABOR MARKET SHOWED SOME

IMPROVEMENTIN 2004. The overall unemployment rate declined

and employment rose. Despite these improvements, the

period since the onset of the 2001 recession and continuing

through 2004 differs from previous recessions and the

recoveries that followed them. 

Notes

ACKNOWLEDGMENT: The author thanks Steve Hipple for compiling

the data from the Annual Social and Economic supplement that are

analyzed in this article.

1

 The National Bureau of Economic Research is generally

recognized as the arbiter of business-cycle turning points. The

organization determined that the latest recession began in March

2001 and ended in November of that year.

2

 For more information on teenage labor force participation, see

Katie Kirkland, “Declining teen labor force participation,” Issues in

Labor Statistics, Summary 02–06, September 2002; on the Internet

at http://www.bls.gov/opub/ils/pdf/opbils49.pdf.

3

 October is a month in which the vast majority of teens are

enrolled in school; therefore, that month was chosen for this analysis.

4

 The Annual Social and Economic Supplement to the CPS is

conducted in the months of February through April and includes

questions about work activity during the previous calendar year.

5

 Social Security Administration, Annual Statistical Supplement

2003, p. 17. See also table 1 in “Social Security Online”; on the

Internet at http://www.ssa.gov/OACT/ProgData/nra.html.

6

 Elizabeth T. Hill, “The labor force participation of older women:

retired? working? both?” Monthly Labor Review, September 2002,

pp. 39–48; on the Internet at http://www.bls.gov/opub/mlr/2002/

09/art4full.pdf.

7

 The data analyzed in this section are annual averages.

8

 Industry data are classified according to the 2002 North American

Industry Classification System (NAICS), whose series go back to 2000.

9

 The data analyzed in this section are annual averages.

10 See Highlights of Women’s Earnings in 2003 for more

information on women’s earnings; on the Internet at http://

www.bls.gov/cps/cpswom2003.pdf.

11 CPS monthly earnings data also first began to be collected

regularly in 1979.

12 For more information about the factors contributing to earnings

differences, see Mary Bowler, “Women’s earnings: an overview,”

Monthly Labor Review, December 1999; on the Internet at http://

www.bls.gov/opub/mlr/1999/12/art2full.pdf.

13 Due to its brevity, the 6-month recession in 1980 that lasted

from January through June is not included in the calculations for

previous recessions. The average is calculated for the indexes for each

month in the 8 recessions.