Unemployment rate April 6, 2013, March jobs report, CNN Money report decent, Labor force participation rate hits historic lows, Half million less in labor force
“With a 63.7% labor force participation, “conditions in the labor market are considerably worse than indicated” in July’s report”…economist Joshua Shapiro, WSJ August 3, 2012
“Since the Democrats took control of both houses of congress in January 2007, the number of people who could only find part time work has gone up 215 percent”…Citizen Wells
“Freedom is the freedom to say that two plus two make four. If that is granted, all else follows.”…George Orwell, “1984″
The US Labor Department, BLS, reported the “unemployment rate” for March, yesterday, April 5, 2013. The stated unemployment rate fell .1 percent.
However, the bigger story is why the unemployment rate fell. People dropping out of the work force in record numbers as well as workers who could only find or were subjected to part time work.
The Labor Force Participation Rate, which fell .2 percent in March, dropped to record lows .
CNN Money cane out with decent reporting of the employment situation. They painted a fairly accurate picture. They neither blamed this on the fuzzy “recession”, as so many in the media have done, i.e. George Bush, or tied it to Barack Obama, which they should have.
From CNN Money April 5, 2013.
“Unemployment rate falls for all the wrong reasons”
“What seemed like good news in Friday’s jobs report was a little less than that — the unemployment rate fell, but not because more people found work.
Instead, the rate was lower because the Labor Department estimated that there are nearly half a million fewer people in the labor force — the group that includes people with a job or looking for one.
In the department’s survey, 206,000 fewer people said they had a job than in the previous month, even though a separate survey of employers in the March jobs report showed 88,000 jobs were added.
In addition, 290,000 fewer people were counted as unemployed because they were not actively looking for work. That drop in those seeking jobs was the reason the unemployment rate fell to 7.6%, the lowest since December 2008.
The participation rate, which counts both those with jobs and those looking for work, fell to the lowest rate since 1979, when far fewer women were in the U.S. labor force. For men age 25 and older, March was the lowest participation on record.
Some of the downward trend in the participation rate in recent years is due to more baby boomers reaching retirement age, along with the longer life span of those who are retired. The greater the percentage of the population that is retired, the lower the participation rate.
The difficulty for younger workers finding jobs is also a factor, as more young adults unable to find work return to school to try to improve their prospects. The participation rate for those age 16 to 24 was near a 50-year low.
But the downturn in March can’t be blamed on demographic factors, according to Heidi Shierholz, a labor economist with the Economic Policy Institute, a liberal think tank. She points out that the participation rate of “prime-age” workers, age 25 to 54, also fell to match the lowest reading since 1984.”
“It’s the lack of job opportunities — the lack of demand for workers — that is keeping these workers from working or seeking work, not other factors,” she said.
Shierholz said estimates from the nonpartisan Congressional Budget Office show there are 3.9 million workers who should be in the labor force but are not because of the weakness in the job market. Counting them as unemployed would take the unemployment rate up to 9.8%.
“The unemployment rate is currently hugely underestimating the amount of slack in the labor market,” she said.”
This is a pretty good report except for a couple of important items.
First, blaming baby boomers retiring for part of the drop. The Washington Post tried to do this and were caught here.
From the Bureau of Labor Statistics January 2012.
Monthly Labor Review, Employment Outlook 2012 – 2012.
“In contrast to the factors exerting downward pressure on labor force participation rates, at least two factors have been responsible for strengthening the rates, although not enough to offset the factors pulling them down:
The labor force participation rate of the 55-years-and-older age group has increased considerably since 1996. In 2000, the rate was 32.4 percent; a decade later, in 2010, it had risen significantly, to 40.2 percent. (See table 3.) BLS projects that the labor force participation rate of those 55 years and older will reach 43.0 percent in 2020. The continued gradual increase in the labor force participation rate of this age group, multiplied by the sheer number of baby boomers in the group, is expected to partially compensate for the multiple other factors pushing the rate to lower levels and is expected to keep it from declining even further in the future.”
Second, let’s lay the blame where it belongs, ignoring for a moment what took place with the Democrats controlling congress in 2007 – 2010.
The Labor Force Participation Rate was 66.1 percent when Obama took office.
It dropped to 63.6 percent in March.
That is a 2.5 percent drop since Obama took the White House in January 2009!