More on the Bad Jobs Report

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Friday, July 02, 2010 at 10:00 am

In June, the labor force — the total number of people either working or looking for work — was 153.74 million. The number of unemployed people was 14.62 million. Ergo, the unemployment rate was 9.5 percent.

But the number of people in the labor force — which normally goes up by about 100,000 people a month — actually declined in June. And it declined a lot — by 652,000 people. Some of those people moved, or retired, or left the country. But, as any economist would tell you, a big proportion of them were likely “discouraged” out of the labor force. They had looked for jobs, couldn’t find one and decided to stop trying. Let’s say none of those people left the labor force, and instead kept looking for a job for another month. In that scenario, we would add those 652,000 people to both the number of unemployed and to the labor force. And we would get an unemployment rate of 9.9 percent — higher than in May.

Of course, this is hypothetical, and does not take into account the impact of census hiring or retirement or a dozen other factors. My point is that the big fall in the unemployment rate is not really telling us about the job market in this specific month’s report, and the job market remains extremely distressed.

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19 Comments

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More on the Bad Jobs Report…

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Matt De Mello
Comment posted July 2, 2010 @ 2:16 pm

Is it possible that the labor force shrank as well because they aren't being counted ax their unemployment claims have expired?


Joshua Cordes
Comment posted July 2, 2010 @ 2:45 pm

That isn't comparing apples-to-apples, though. You'd have to compare that 9.9% rate to the May rate calculated under the same rules, i.e. counting newly discouraged workers as unemployed. It very well might still be higher than May's, but I think you see my point.


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Unemployed american
Comment posted July 2, 2010 @ 4:05 pm

the usa government is doing all it can to avoid posting an unemployment rate of 10.0% or higher – it is doing its damndest to avoid posting double figures.

thus, it manipulates the hell out of the numbers.

it is all just one big lie and has nothing to with REALITY.

the usa is avoiding dealing with REALITY and TRUTH like the Plague.

when our unemployment ran out after 26 weeks when we got laid off in August 2005 ( yes, 2005 ), we stopped being counted as unemployed guaranteed.

we have NEVER been contacted or surveyed by any governmental agency or unit.

it is all Total Bullshit and the biggest gd LIE.

so today, MAGICALLY, 650,000 people decide to drop out of the workforce and thus the unemployment rate, instead of reaching or crossing the psychological barrier of 10% thus drops to 9.5% and everything is A-OK.

LOFAO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

what is the U6 Unemployment rate today ??? still above 17% ??? that is the REAL unemployment rate. NOT the U3 crap that the mainstream amerikan corporate media spews.


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Pingback posted July 2, 2010 @ 6:44 pm

[...] The economy lost jobs in June, but the unemployment rate nonetheless went down from 9.7% in May.  Huh?  Well, if you use the U3 figure like the President did, it refers to the fact that 9.5% of those still looking for work cannot find it.  If you use the U6 numbers of actual unemployed (looking or not) it’s closer to 16.5%.  If you use the common U3 figure but included the 652,000 or so workers too discouraged to look for work anymore in June, we’d be closer to 9.9%. [...]


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Comment posted July 2, 2010 @ 7:53 pm

Bingo! “Rethugs” attempt to stop recovery in a flash.


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