Sunday, December 6, 2009

Why The Unemployment Rate Dropped: 291,000 People "Left The Workforce"

The Bureau of Labor Statistics released the latest unployment figures on Friday, reporting a drop of the unemployment rate to 10.0%. However they also said that the economy lost 11,000 jobs. Apparently nobody in the media apparently paid any attention to the details.

So how is it possible that the unemployment rate drops while we still lost jobs?

The answer lies in the numbers they release:

Note the last column. Those "not in the workforce" increased by 291,000.

And that is why the unemployment "dropped" to 10.0%. Fewer people looking for jobs, that is, according to trhe BLS.

Somehow, the population continues to increase in the U.S every month, but those not in the labor force actually drop.

These people not looking for jobs won't be spending either.

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