“The more you drill down into the November jobs report, the worse it looks,” writes Jim Pethokoukis. How could it look bad when the unemployment rate is shrinking? Because that rate isn’t shrinking because more Americans are finding jobs. That rate is shrinking, for the most part, because so many Americans are giving up on finding a job.
Yes the nation added 146,000 jobs, but that’s just enough to tread water when you factor in population growth and not the reason the unemployment rate went down. The rate went down because the total pool of American workers shrunk. Again.
The two-tenths drop in the unemployment rate was because people gave up looking for work. The labor force participation rate fell to 63.6% from 63.8% in October. If it had just held steady since then, the unemployment rate would be back over 8%. …
If labor force participation was at its January 2009 level, the unemployment rate would be a whopping 10.7%.
Here’s a chart showing the labor force participation rate (the percentage of Americans participating in the work force):
Meanwhile, average hourly earnings continue to plunge:
But the unemployment rate went down slightly so, you know, yippee.