For most people, the 8.3 percent unemployment rate is the most visible sign of the economy’s health. The rate’s every movement is closely watched, especially in an election year.Yes, there's always a story behind the stats, and yes, the unemployment rate looks better than it actually is for all the aforementioned reasons.
But when the rate declines, it’s not always because many more people were hired. The unemployment rate can rise or fall even when no jobs are created or lost.
Last month, the rate fell because jobs were added. But that hasn’t always been the case in the 2½ years since the Great Recession ended. One reason for the rate’s decline is that fewer people are looking for work.
The unemployment rate counts only people who don’t have a job and are looking for one. Once you stop looking, you’re no longer considered unemployed.
In January, the number of people either working or looking for work — who collectively form the labor force — rose. That’s an encouraging sign. It suggests that more of the unemployed were optimistic about finding a job.
The situation has shifted over the past year. The labor force has grown. But it hasn’t grown as fast as the overall population. The result: The proportion of the population either working or seeking work has fallen from 64.2 percent to 63.7 percent. That’s known as the labor force participation rate.
That drop is a big reason why the unemployment rate has declined in the past year.
The government tracks unemployed people who have given up looking for work in the past year. It calculates that if they were still job-hunting, but hadn’t found work, the unemployment rate would have been 8.9 percent last month.
That figure is much higher than the unemployment rate of 8.3 percent. But like the unemployment rate, it’s dropped sharply over the past year.
That said, it's not like the criteria for measuring unemployment has somehow been modified by the Obama Administration. Not counting folks who stopped looking has always been the case. And regardless of what the unemployment rate is, the overall trend is clear. We've had almost 2 years of private sector job growth. There were 257,000 such jobs created in January, across a multitude of industries. The comeback is real, and it looks likely to be sustained, even as people return to Monster.com.
Watching GOP haters try and discredit these numbers has been both hilarious and disgusting, sorta like an episode of Mob Wives. They've claimed Obama's cooking the numbers (the BLS is independent and full of career statisticians). They've claimed the economy is still worse under Obama than it was under Bush (on which planet?). I even heard some ingrate suggest we're seeing job growth because the GOP controlled House prevented Obama from doing anything all last year. Yep, folks are getting desperate.
How hard is it to just give the man some credit? If you blame him when things are going bad, the decent thing to do is give him props when things are better.
But that would be too much like right.
Question: What do these numbers mean for the prospects of Obama and Romney come November?