How did they manage to lower the unemployment rate when there are fewer jobs? I suspect “seasonal adjustment” or abuse o the birth/death model but have to get the raw data to figure it out. Fishy, to say the least..
Unemployment Rate = # of Unemployed/Labor Force. The key is in order to be counted as unemployed and part of the labor force you have to be actively seeking a job. So you can no longer be counted as unemployed because you gave up looking for a job so that is what happened in June.
It was just a bunch of people listening to wily ol’ Joe Biden... He told them the jobs aren’t coming back, so they just gave up looking.
Less people looking, more people dropping off the roles = a lower rate.
No - a large number of people are considered to no longer be in the workforce, the “labor force participation rate” - which went down by 0.3%.
Put another way, the BLS says that the size of the whole labor force decreased by 650K+ people.
Smaller workforce, unemployment rate goes down.
The labor force size has remained nearly flat for the last three years. Had the participation rate not declined so much in the ‘07 to ‘09 years, we’d be printing a U-3 unemployment rate of over 11.5%.
As with all these reports, I keep thumping on the barrel, telling Freepers to read the guts of these reports. They’re free, they’re easily accessible, and they’re not hugely difficult to interpret. They are, however, as exciting as watching paint dry. I don’t dispute that when you read enough of these wretched things, you want to puke up your socks before you read another one. But the good news is this: they don’t change in format or style. Once you learn how to read the BLS and BEA reports, and you’ve read, oh, three of them in a row, you know where to look in the reams of data for the deltas you’re seeking. I don’t read through every damn line in these wretched things any more - I can flip through, looking for the nuggets I want to find, because the interesting things are in the same place (relatively speaking) in every report.
Look at “Household Data, Summary Table A.” Read down through it, and you’ll see how the figures estimating a) the size of the workforce and b) the numbers of people no longer in the workforce spell out a different story than the headline number.
This is all what to examine before we start worrying about seasonal adjustments, the stupid “birth/death” model, etc.
http://www.bls.gov/news.release/pdf/empsit.pdf