Alabama’s labor force participation rate and unemployment rate both increased in October from previous months, but only slightly.
According to the Alabama Department of Labor, the preliminary unemployment rate for October is 2.3%, a .1% rise from September’s 2.2%. Still, the state’s unemployment rate is over an entire percentage point below the country’s overall unemployment rate of 3.9%.
According to Federal Reserve Economic Data, Alabama’s labor force participation rate also rose. In September, it was 57.1%. In October, it was 57.4%.
The labor force participation rate measures “the number of people in the labor force as a percentage of the civilian noninstitutional population.”
According to Investopedia, the labor force participation rate predicts the size of an economy’s active workforce. The labor force participation rate is calculated by dividing the number of individuals above the age of 16 in a given population by the total number of working-age individuals who are not institutionalized or in the military.
Unlike the unemployment rate, the labor force participation rate considers individuals who have stopped looking for work but still are capable of working. It also is a measure of the percentage of people who are working rather than the percentage of people who are not.
Alabama’s labor force participation rate remained within .5 percentage points of 57% since November 2020, when it dropped to 57.5% from 57.8% in October 2020.
The state’s labor force participation rate reached its high point in 1997 at 65.1% before declining consistently throughout the 2000s. In 2015, it reached 55.7%, the lowest it has ever been, aside from April 2020, the month after the COVID-19 pandemic took hold in the U.S. After 2015, the labor force participation rate rose steadily until COVID.
It has mostly remained below 60% since 2008.
Meanwhile, the national labor force participation rate hasn’t been below 60% since the 1960s. The national labor force participation rate in October was 62.7%, a .1 percentage point decrease from September’s 62.8%.
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