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Here’s What The Unemployment Rate Looks Like If You Add Back Labor Force Dropouts
The Federalist ^ | 03/06/2015 | Sean Davis

Posted on 03/06/2015 8:04:52 AM PST by E. Pluribus Unum

The Department of Labor announced today that the official unemployment rate fell to 5.5 percent last month, the lowest it’s been since Spring of 2008. Good news, right? Well, kind of. The official unemployment rate masks a problem that’s been plaguing the economy since shortly before the 2009 recession: a continuing decline in the labor force participation rate, which basically measures the percentage of the able-bodied population that’s either working or looking for work. After holding steady at roughly 66 percent from 2004 through late 2008, the labor force participation has been falling, and falling, and falling some more, with no end in sight.

This decline has significant effects on the official unemployment rate. People who are unemployed and eventually stop looking for work are no longer counted as being part of the labor force, which means they’re no longer counted by U.S. statistical agencies as being unemployed (you can read in detail about the math underlying this dynamic here). The result? An artificially low official unemployment rate.

Unemployment Rate With Labor Force Dropouts March 2015

So what does the unemployment rate picture look like if you take into account all of the labor force droputs since the end of the recession in June of 2009? Not pretty. If you take those labor force dropouts into account, the U.S. does not have an unemployment rate of 5.5 percent. Instead, it has a likely unemployment rate of 9.6 percent, and that’s hardly good news.


TOPICS: News/Current Events
KEYWORDS: employment; laborforce; unemployment

1 posted on 03/06/2015 8:04:52 AM PST by E. Pluribus Unum
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To: E. Pluribus Unum

I think 9.6 is low.


2 posted on 03/06/2015 8:07:03 AM PST by Tijeras_Slim
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To: Tijeras_Slim

My first thought was 9.6 ?

I thought it would be much higher.


3 posted on 03/06/2015 8:08:47 AM PST by Zeneta (Thoughts in time and out of season.)
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To: E. Pluribus Unum

CNN was bubbly this morning with the great unemployment news. Many of us know better.


4 posted on 03/06/2015 8:09:05 AM PST by ilovesarah2012
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To: ilovesarah2012

It’s their job to feed the sheeple propaganda.


5 posted on 03/06/2015 8:10:01 AM PST by Blood of Tyrants (True followers of Christ emulate Christ. True followers of Mohammed emulate Mohammed.)
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To: E. Pluribus Unum
Even adjusted, it still does not count people who are underemployed or are working at reduced rates.

If you're not a big campaign bundler for Obama, or working in a government position, you are quite unlikely to be doing better under Obama.

6 posted on 03/06/2015 8:13:08 AM PST by dead (I've got my eye out for Mullah Omar.)
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To: Tijeras_Slim

Lot of sources say 23% unemployment is the real number.

http://www.usnews.com/opinion/articles/2014/07/23/the-real-unemployment-rate-and-the-dearth-of-full-time-jobs


7 posted on 03/06/2015 8:22:25 AM PST by jsanders2001
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To: ilovesarah2012

I agree the REAL number is more like 12-14%

At least that’s what Fox Business people have been saying for quite some time.

And .. one of the reasons the liberal news is not faring so well is more and more people are being exposed to the truth.


8 posted on 03/06/2015 8:24:09 AM PST by CyberAnt ("The hope and changey stuff did not work, even a smidgen.")
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To: CyberAnt

Unemployment rate falls as all-time high number drop out of labor force

Employers added 295K jobs in February

Trey GarrisonMarch 6, 2015 7:45AM

http://www.housingwire.com/articles/33171-unemployment-rate-falls-as-all-time-high-number-drop-out-of-labor-force


9 posted on 03/06/2015 8:29:10 AM PST by ilovesarah2012
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To: Zeneta
I thought it would be much higher.

It is.

This article is highlighting a single variable.

The definition of "employed" includes a lot of people that a practical person would hardly consider employed in a realistic, real world sense. 2 hours a week mowing lawns is defined as fully employed in that mythical 5.5%.

The 50 hour a week $60k middle management person is counted the same now that he is working 10-20 hours a week for minimum wage.

And so on, ad nauseum.

10 posted on 03/06/2015 8:44:43 AM PST by ChildOfThe60s (If you can remember the 60s, you weren't really there....)
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To: ChildOfThe60s

Yes you have explained it quite well.


11 posted on 03/06/2015 8:45:37 AM PST by nascarnation (Impeach, convict, deport)
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To: E. Pluribus Unum

Is this corrected for baby boomer retirements?

We are a demographic bulge. A drop in participation rate should follow.


12 posted on 03/06/2015 8:50:26 AM PST by cicero2k
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To: E. Pluribus Unum

Remember when the Rats were slamming Bush’s 4% to 5% unemployment rate as the “worst economy since the Great Depression”?


13 posted on 03/06/2015 8:51:14 AM PST by Fresh Wind (Falcon 105)
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