Friday, January 7, 2011

Unemployment Falls to 9.4%

You would think that having the unemployment drop four-tenths of a percent in a month would be cause from great celebration. In this case it is not given the reason for the decline. While a bit over 100k jobs were created, slightly more then 450k people have given up looking for work. The numbers for this month indicate that we are discouraging our way out of high unemployment instead of actually putting people back to work.

"The nation’s unemployment rate dropped four-tenths of a point to 9.4% in December but the number of jobs added fell short of expectations.  According to the Department of Labor, the economy only added 103,000 jobs, an improvement over the previous few months, but short of the 160,000 economists had been expecting, and far short of ADP’s projection of 297,000.  In another oddity, the number of unemployed fell by five times the number of jobs added:

The unemployment rate fell by 0.4 percentage point to 9.4 percent in December, and nonfarm payroll employment increased by 103,000, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality and in health care but was little changed in other major industries.

The number of unemployed persons decreased by 556,000 to 14.5 million in December, and the unemployment rate dropped to 9.4 percent. Over the year, these measures were down from 15.2 million and 9.9 percent, respectively.

The one explanation for the difference would be an increase in discouraged workers. That number rose from last December by 389,000; November’s figures are not available (the historical data set was down). Also, the civilian labor force participation rate did drop to 64.3%, which indicates that people are still leaving the work force rather than rejoining it."

To put this in the contexts of the last year and a half; after rising to %9.5, 'fake' falling to %9.4, rising to %9.7, and then rising again to 9.8%, and rising again to 10.2%, dropping to 10%, held steady, dropping to 9.7%, held steady, held steady again, increased to 9.9%, dropped to 9.7%, fell to 9.5%, holding steady, rising a tick to 9.6%, held steady, held steady again, increased to 9.8%, and has now 'fake fallen' to 9.4%.

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