There’s good reason to be confused about the Labor Department’s latest unemployment figures, which showed that the nation’s jobless numbersrose by 11,000 last month while the jobless ratefell 0.2 percent. Peter Morici, business professor at the University of Maryland, explains why the news of that rate decrease isn’t as good as it appears on the surface. “Job losses at only 11,000 was good news but unemployment fell to 10 percent as much because folks left the labor force — throwing up their arms in frustration — as folks finding new work,” he wrote today. “In the household survey used to calculate the unemployment rate, 227,000 adults were added to the rolls of the employed or self-employed but the number choosing not to look for work increased 291,000.”
So those newly giving up hope of finding a job outnumbered those newly employed by roughly 64,000 last month. With that in mind, the pronounced decrease in the jobless rate is somewhat meaningless. What the government really needs is a new method of calculating unemployment.