10 PART 1: RECENT ECONOMIC AND FINANCIAL DEVELOPMENTS Employment Disparities between Rural and Urban Areas The U.S. labor market has recovered substantially A. Employment-to-population ratios since 2010. For people in their prime working years (ages 25 to 54), the unemployment rate has move Monthly down steadily to levels below the previous business cycle peak in 2007, the labor force participation rate (LFPR)has retraced much of its decline and the share of the population who are employed-known as the mployment-to-population ratio, or EPOP ratio- has returned to about its level before the recession However, the labor market recovery has been uneven across the country, with"rural"(or nonmetro)areas howing markedly less improvement than cities and ndings(metro areas).' Non-MSA The extent of the initial decline and subsequent improvement in the EPOP ratio varied by metropolitan LLL⊥⊥⊥ LILL⊥⊥L status. The gap between the EPOP ratios in rural and 19982001200420072010201320162019 before the recession, and the cyclical recovery stane. as larger urban areas is now noticeably wider than it MSAs consist later in rural areas. Specifically, as shown in figure A 500,000 people. The shaded bars indicate periods of business efined by the National Bureau of Econc the prime-age EPOP is now slightly above its pre- eferences listed in box note 2 recession level in larger urban areas, whereas it is just below its pre-recession average in smaller urban areas and much below its pre-recession level in rural areas. B. Unemployment rates The EPOP ratio can usefully be viewed as summarizing both the LFPR--that is, the share of the population that either has a job or is activel king for work-and the unemployment rate, which measures the share of the labor force without a job and actively searching. The divergence in rural and urban EPOP ratios during the economic expansion almost entirely reflects divergences in LFPRs rather than in unemployment rates(figures B and C). In particular, the rural and urban unemployment rates have tracked each (continued) Non-M 1. For convenience, we refer to metropolitan counties with strong commuting ties to an urbanized center as"urban"and Larger MSAs nonmetropolitan counties that lack such ties as"rural. 2. For all figures in this discussion, the raw data are from the U.S. Census Bureau, Current Population Survey; note L⊥L⊥⊥⊥LL⊥L⊥1L⊥⊥LL⊥1L process for the Current Population Survey. Calculations o> hat the bureau of labor statistics is involved in the su 99820012004200720102015 he series shown are as described in Alison Weingarde (2017),"Labor Market Outcomes in Metropolitan and lon-metropolitan Areas: Signs of Growing Disparities, of100.000to500.000 he sh bars indicate periods of business FEDS Notes (Washington: board of Governors of the Federal recession as defined by SOURCE: References box note 2 ReserveSystemSeptember25),www.federalrese otes/labor-market. sparities-20170925. htm. The figures show 12-month moving es of the monthly time-series. 3. Specifically, the EPOP ratio equals(LFPR)x( bor force. "These numbers are multiplied by unemployment rate), where LFPR is defined as"labor force/ 100 for presentation purposes in the figures.10 PART 1: RECENT ECONOMIC AND FINANCIAL DEvELOPMENTS Employment Disparities between Rural and Urban Areas The U.S. labor market has recovered substantially since 2010. For people in their prime working years (ages 25 to 54), the unemployment rate has moved down steadily to levels below the previous business cycle peak in 2007, the labor force participation rate (LFPR) has retraced much of its decline, and the share of the population who are employed—known as the employment-to-population ratio, or EPOP ratio— has returned to about its level before the recession. However, the labor market recovery has been uneven across the country, with “rural” (or nonmetro) areas showing markedly less improvement than cities and their surroundings (metro areas).1 The extent of the initial decline and subsequent improvement in the EPOP ratio varied by metropolitan status. The gap between the EPOP ratios in rural and larger urban areas is now noticeably wider than it was before the recession, and the cyclical recovery started later in rural areas. Specifically, as shown in figure A, the prime-age EPOP is now slightly above its pre￾recession level in larger urban areas, whereas it is just below its pre-recession average in smaller urban areas and much below its pre-recession level in rural areas.2 The EPOP ratio can usefully be viewed as summarizing both the LFPR—that is, the share of the population that either has a job or is actively looking for work—and the unemployment rate, which measures the share of the labor force without a job and actively searching.3 The divergence in rural and urban EPOP ratios during the economic expansion almost entirely reflects divergences in LFPRs rather than in unemployment rates (figures B and C). In particular, the rural and urban unemployment rates have tracked each 1. For convenience, we refer to metropolitan counties with strong commuting ties to an urbanized center as “urban” and nonmetropolitan counties that lack such ties as “rural.” 2. For all figures in this discussion, the raw data are from the U.S. Census Bureau, Current Population Survey; note that the Bureau of Labor Statistics is involved in the survey process for the Current Population Survey. Calculations of the series shown are as described in Alison Weingarden (2017), “Labor Market Outcomes in Metropolitan and Non-metropolitan Areas: Signs of Growing Disparities,” FEDS Notes (Washington: Board of Governors of the Federal Reserve System, September 25), www.federalreserve. gov/econres/notes/feds-notes/labor-market-outcomes-in￾metropolitan-and-non-metropolitan-areas-signs-of-growing￾disparities-20170925.htm. The figures show 12-month moving averages of the monthly time-series. 3. Specifically, the EPOP ratio equals (LFPR) x (1 – unemployment rate), where LFPR is defined as “labor force/ population” and the unemployment rate is defined as “persons unemployed/labor force.” These numbers are multiplied by 100 for presentation purposes in the figures. (continued)