What labor force flows data can tell us about the current labor market
These are a rich and under-utilized data source
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Are we in a weak labor market? That’s the assessment of many, even if we aren’t officially in a recession. The unemployment rate is still low, job growth is modest but not negative. The question is, why would so many people feel like we’re in a weak labor market?
One answer might have to do with labor market flows. Flows are the number of transitions between labor force status each month. How many people who were employed last month are now unemployed this month? How many unemployed last month have now quit looking for work altogether? These are important questions that are sometimes overlooked, since they aren’t part of the headline jobs or unemployment rate statistics.
But the BLS does publish this information – it’s just hard to dig up. You can do so here. See the chart above, which summarizes some of these data for April -> May, 2024 and 2025.
One of the reasons why these data are harder to find is that each statistic is telling its own story, so it can be hard to write quick pieces that summarize all the information in them. For example, in the table above, Employed -> Not in LF, which increased 21.8% in 2025 and only 10.4% in 2024, most likely refers to increases in retirees or hard layoffs, or possibly some seasonal jobs that end as we transition into the summer. On the other hand, Unemployed -> Not in LF, which increased 2.2% in 2025 and only 0.6% in 2024, likely refers to a rise in discouraged workers – people out of work who were searching for work, but who are now just out of the labor force – likely because they’ve given up (i.e., they’re discouraged).
These data are telling a consistent story. Consider the first main column. Between April and May 2025, job-to-job transitions changed -0.5%, which is lower than the -0.1% change between the same two months in 2024. Unemployed-Employed transitions are also down (-2.8% vs. -0.9% a year earlier). In short, fewer people are finding new jobs this year.
The second main column is also telling a consistent story of an increase in employed-unemployed transitions (+16.4% this year vs. -10% last year), and unemployed-unemployed transitions (+2.7% in April-May 2025 vs. +0.1% April-May 2024). In other words, we’re seeing more flows into unemployment this year than last year.
Finally, the third column is showing the increase of flows into being “not in the labor force”, which I discussed above. These are also concerning and can explain the drop we’ve noticed in the labor force participation rate.