November BLS report shows job growth, but not all good news

The Bureau of Labor Statistics released the jobs report for last month, which on the surface looks like a positive; in that the economy added 120,000 jobs and the unemployment rate decreased to 8.6%:

Job creation remained weak in the U.S. during November, with just 120,000 new positions created, though the unemployment rate slid to 8.6 percent, a government report showed Friday.

The rate fell from the previous month’s 9.0 percent, a move which in part reflected a drop in those looking for jobs. The participation rate dropped to 64 percent, from 64.2 percent in October.

The actual employment level increased by 278,000. The total amount of those without a job fell to 13.3 million.

The measure some refer to as the “real” unemployment rate, which counts discouraged workers, also took a steep fall to 15.6 percent from 16.2 percent, its lowest level since March 2009.

The growth for November is right around what is needed to keep up with population growth, and numbers for October were revised upward to over 200,000 jobs. So this is very good news, right? That depends on how far into the numbers you go. On the surface a 8.6% unemployment rate is welcome news comparatively speaking.

However, the report notes that some 315,000 umemployed people got out of the job market. As Conn Carroll notes, the “jobless rate counts only people who are actively looking for work.” So when you remove a chunk of people from the number of the unemployed — again, not because they found work, the umeployment rate will only go down. That’s basic math, but it won’t be the lede in many stories.

Both Ezra Klein and Matthew Yglesias, both have been typically cheerleaders for the White House, have expressed some skepticism. Klein tweeted, “Bad news deep in the jobs report: most sectors down. The boost came from retail sales, so it might just be temp. holiday hiring.” And Yglesias, also on Twitter, explains, “Decreasing unemployment by shrinking the labor force is not exactly winning the future.”

Doug Mataconis also notes this interesting bit of information (emphasis mine):

[T]he drop in the unemployment rate is largely attributable to the fact that some 310,000 people simply stopped looking for work and therefore are no longer counted as unemployment. The Labor Force participation rate fell from 64.2% to 64.0%, if that figure were at the same level it was at the time President Obama took office, the current unemployment rate would be 11%.

Yeah, the unemployment rate is down, but given everything we know now; this report just isn’t that encouraging.

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