Are you gratified by last Friday’s happy news that America’s jobless rate has “fallen” to 8.2%? Did that news cause you to think that the economy is “rebounding”?
If so, don’t.
Only if you pay attention to the details would you realize the real meaning and significance of that 8.2%.
You see, the U.S. unemployment rate “fell” to 8.2% from the previous month’s 8.3% only because even more Americans than the month before have given up looking for work. In fact, nearly 88 MILLION Americans — a record 87,897,000 — are no longer in the labor force.
Here are some more numbers to put that 8.2% jobless rate into perspective, provided by Mish’s Global Economic Trend Analysis:
- In the last year, the civilian population rose by 3,604,000. Yet the labor force only rose by 1,315,000. Those not in the labor force rose by 2,289,000.
- The Civilian Labor Force fell by 164,000.
- Those “Not in Labor Force” increased by 310,000. If you are not in the labor force, you are not counted as unemployed.
- Those “Not in Labor Force” is at a new record high of 87,897,000.
- By the Household Survey, the number of people employed fell by 31,000.
- By the Household Survey, over the course of the last year, the number of people employed rose by 2,270,000.
- Participation Rate fell .1 to 63.8% — which means only 63.8% of the U.S. population actually work.
- Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.
To conclude: Over the past several years people have dropped out of the labor force at an astounding, almost unbelievable rate, holding the unemployment rate artificially low. Some of this was due to major revisions last month on account of the 2010 census finally factored in. However, most of it is simply economic weakness.
So the next time some sheeple tells you “The economy is improving!” (as my brother, who has an MBA, told me 2 weeks ago), show them this post.