Next week market mavens and economists will be focused on the question of whether the Federal Reserve announces a rate hike at the conclusion of their September 16-17 meeting. Today the Financial Times reported that World Bank chief economist, Kaushik Basu, has warned the Fed to delay a rate rise to avoid the risk of “panic and turmoil” in emerging markets.

At this point, the Fed’s dual mandates appear to be sending mixed messages. Inflation remains well below the Fed’s 2% target for the core PCE price index, currently at 1.24%. Employment, on the other hand, has been steadily improving in the two most closely watched headline numbers, the number of new nonfarm jobs and the unemployment rate. That said, we continue to monitor the evidence of major structural changes in the US workforce.

Here is an updated series of charts illustrating some changes that are far more significant than the cyclical impact of the 18-month Great Recession, which the NBER indentified as beginning in December 2007.

The Unemployment Rate: Additional Jobs Needed to Match Lows

The closely watched headline unemployment rate is a calculation of the percentage of the Civilian Labor Force, age 16 and older, currently unemployed. Let’s put that into its historical context. The first chart below illustrates this monthly data point since 1990.

The indicator for August dropped from 5.3% to 5.1%. Today’s Civilian Employed would require 1.1 million additional job holders to match its interim low in 2007, and we would need 2.0 million to match the lowest rate in 2000.

Additional Jobs Needed for the Prime Employment Age Group

Let’s look at the same statistic for the core workforce, ages 25-54. This cohort leaves out the employment volatility of the high-school and college years, the lower employment of the retirement years and also the age 55-64 decade when many in the workforce begin transitioning to retirement (e.g., two income households that evolve into one-income households).