Jobless Rate Dives To 9-Year Low; Is Labor Market Too Tight?

Investors Business Daily ^ | 12/02/2016 | JED GRAHAM

[LeonardFMason]

“Practically everything said on this thread so far is wrong, misguided and stupid.”

Are you denying the fact that able bodied workers, those people who would/want work have dropped out of the number of the unemployed? If the current unemployment rate doesn’t even count this population doesn’t the number from the BLS become meaningless? Do you really believe of the 310,000,000 people in the US the amount of folks retired/ not able to or interested in working is 95,000,000?

Don’t call folks wrong, misguided, and stupid without taking a few sentences to explain what the uninformed are missing.

You come off like an asshole.

[Night Hides Not]

How can there be such low unemployment when there are 96 million out of work. The DOL needs a lot of upgrading.

U-6 is a more accurate unemployment rate.

Per CNBC, "The U-6 rate fell to 9.3 percent in November. The U-6 rate is defined as all unemployed as well as "persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the labor force." That means the unemployed, the underemployed and the discouraged."

[RainMan]

No, it makes perfect sense, go get some coffee and I will explain.

Unemployment nowadays is not mitigated by job growth, but rather by drops in the workforce participation rate. In short, the way the government counts unemployment is based on whether someone is getting unemployment benefits. Once they no longer qualify for benefits, they are no longer unemployed, they are classified as no longer participating in the workforce. Ergo, when the workforce participation number goes down, it means that more people exhausted their unemployment benefits and now have officially left the workforce (according to the government). Woo hoo, the government gets to tout a rosy statistic that the unemployment number dropped, but it is all smoke and mirrors, because it really didn't.

My personal opinion is that Trump should dump the unemployment rate ... it has been gamed for so long that nobody actually believes it as meaning anything anymore. Instead, he should set a number like 75% for workforce participation, and then track progress against that. The other metric I would love to see reported on a weekly basis is taxable income (tax basis for government). That going up and down would tell real data about wages in the country ... whether people were getting good paying career type jobs or burger flipping jobs.

[elpadre]

Thanks! I was unaware of this as, I suspect, most of America is unaware. Obama touts the under 5% figure. In my day 5% denoted full employments as it was validly believed there is always 5% unable or unwilling to work.

[stephenjohnbanker]

Matbe Mexico and China need to quit watching CNN......

[weezel]

In 2007 with the same unemployment number, labor participation was 66%, compared to 62% now.

[babble-on]

exactly that.

And most serious people don’t even look that closely at the Unemployment Rate, because it always has been one where a lot of assumptions have to go into its creation. But that doesn’t mean that the assumptions are cynical, or are intentionally skewed by politically motivated evildoers.

The trajectory of non-farm payrolls, the hours worked and the average wages are the best indicators of whether or not we are getting to a point of tight labor markets.

At 180k a month in employment gains, we have soaked up a lot of the decline in labor participation, but not all of it, and the relatively slack pace of wage gains indicates that we are likely not yet at a place where there are significant inflation risks.

So the job market has improved significantly since the last recession, but we’re not flashing danger signs that the economy is overheating.

[ClearCase_guy]

I believe the Democrats called that situation “the worst economy since Hoover”.

[expat_panama]

...the job market has improved significantly since the last recession, but we’re not flashing danger signs that the economy is overheating...

It's super controversial but taken as a whole this is the same conclusion I come to.  My guess is that there are an awful lot of others on the FR who concur, they're just not nearly as noisy as them that don't.

[minnesota_bound]

When JED GRAHAM loses his job as a “journalist’ as they are being fired everyday will he think the job market has tighten when he cannot find another job?