Welch Consulting Employment Index Continues Rebound in June

The Welch Consulting Employment Index rose 2.6 points in June, from 90.2 to 92.8. This continued rise in the Index has reversed over 35% of the Index’s sharp decline in April. However, while not its lowest point, a value of 92.8 is still well below the record high of 103.4 that the Index set in January.

The Welch Index is a big data analytics tool used by our labor economists to measure full-time equivalent employment after adjustment for population growth and the aging of the workforce. An Index value of 100.0 indicates that adjusted full-time equivalent employment is the same as its level in the base year of 2004.

Over the past 12 months the Index has now fallen 9.7 points, from 102.5 to 92.8. The decrease in the Index over the past year indicates that full-time equivalent employment has been shrinking relative to the growth of the adult population. This means that full-time equivalent employment increased at a rate 9.7% slower than the increase in the U.S. adult population over the past year (after making adjustments for aging). Looking back at the most recent 6 months, the Index fell from 103.3 in December to 92.8 currently. All of the decline in the past year has occurred since January. The average rate of change over the past three years is now a decrease of about 2.6% per year.

In June the Index for women again increased more than the Index for men. The Index for women rose 3.8 points, from 92.2 to 96.0. The Index for men rose 1.8 points from 88.6 to 90.4. The Index for women has recovered about 40% of its April decline, while the Index for men has only recovered about 32% of its decline. Our economic consulting experts find these increases to be consistent with businesses re-opening across the country as cities loosen their safety restrictions relating to COVID-19. Over the past three years the Index for women is down 7.3 points while the Index for men is down 8.2 points.

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch Index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the distribution in the base year of 2004. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.