Obamanomics: Unemployment Falls Because Nobody’s Looking For Work
January 10, 2014 by Ben Bullard
According to the Bureau of Labor and Statistics, the American economy added 74,000 jobs in December of 2013 – and yet the unemployment rate still managed to fall from 7 percent to 6 percent.
How can that be? Because nobody’s looking for work.
The civilian labor force in December shrank again, this time from 155.3 million to 154.9 million people. By percentage, that means the current 62.8 percent participation rate in today’s labor force is the lowest it’s been since 1978.
Meanwhile, there are now 91.8 million people not participating in the labor force – an all-time high that shows no sign of slowing down. About half a million people dropped out of the labor force in December alone, far outpacing the meager 74,000 added jobs.
The employment-to-unemployment ratio sits stagnantly at 58.6 percent to 41.4 percent. For all of 2013, the economy grew by an average of 182,000 jobs each month – more than double the December figure. And the matrix of 74,000 new December jobs can’t be envied for its quality. The retail sector was responsible for 55,000 of those jobs – 24,000 of which were in food and clothing stores.
In fact, if the labor force had held steady at its 2009 level of 162 million – before a “post-recession” decline that saw an additional 7 million people drop out – the actual unemployment rate would now stand at 10.8 percent. But the BLS doesn’t use workforce dropouts to tally unemployment, even though people who don’t have jobs and aren’t looking for work are, by definition, unemployed.