Whitehouse.govThe unemployment dropped a decimal point in
today’s jobs report, from 7.4 percent last month to 7.3 percent.
Good news, right? Well, not so much. The reason the unemployment
rate went down was not because people found jobs. It was because
they stopped looking for them. In the last month alone, 312,000
people dropped out of the labor force, according to the Bureau of
Labor Statistics.

People who aren’t looking for a job aren’t counted in the
headline unemployment figure, and
as the AP notes, right now the percentage of people who either
have a job or want one—the labor force participation rate—is at
63.2 percent, the lowest its been since 1978.  

That weighs heavily on today’s numbers. If everyone who dropped
out of the workforce had kept looking for a job, the unemployment
rate would have risen a decimal point, to 7.5 percent. And the
broader decline in labor force participation has also made a big
impact on the overall unemployment-rate drops we’ve seen in the
last few years: If the labor force participation rate were the same
today as it was before the recession threw a wrench into the
economy, the
unemployment rate would be in the range of 9.7 percent.

As for actual job creation last month, well, there’s not much to
get excited about there either. The economy added just 169,000 new
jobs last month. That’s not nothing, but it’s pretty slow going.
Ezra Klein
points us to The Hamilton Project’s page on the “jobs
gap”—the number of new jobs the economy has to create in order to
both create enough work for new labor force entrants and return the
economy to pre-recession levels. The Hamilton Project estimates
that the economy needs to create an average of 208,000 jobs each
month to get there by 2020. At last month’s pace, we won’t get
there until sometime in 2023. 

Whitehouse.govThe unemployment dropped a decimal point in
today’s jobs report, from 7.4 percent last month to 7.3 percent.
Good news, right? Well, not so much. The reason the unemployment
rate went down was not because people found jobs. It was because
they stopped looking for them. In the last month alone, 312,000
people dropped out of the labor force, according to the Bureau of
Labor Statistics.

People who aren’t looking for a job aren’t counted in the
headline unemployment figure, and
as the AP notes, right now the percentage of people who either
have a job or want one—the labor force participation rate—is at
63.2 percent, the lowest its been since 1978.  

That weighs heavily on today’s numbers. If everyone who dropped
out of the workforce had kept looking for a job, the unemployment
rate would have risen a decimal point, to 7.5 percent. And the
broader decline in labor force participation has also made a big
impact on the overall unemployment-rate drops we’ve seen in the
last few years: If the labor force participation rate were the same
today as it was before the recession threw a wrench into the
economy, the
unemployment rate would be in the range of 9.7 percent.

As for actual job creation last month, well, there’s not much to
get excited about there either. The economy added just 169,000 new
jobs last month. That’s not nothing, but it’s pretty slow going.
Ezra Klein
points us to The Hamilton Project’s page on the “jobs
gap”—the number of new jobs the economy has to create in order to
both create enough work for new labor force entrants and return the
economy to pre-recession levels. The Hamilton Project estimates
that the economy needs to create an average of 208,000 jobs each
month to get there by 2020. At last month’s pace, we won’t get
there until sometime in 2023.