Nonsequitur: Unemployment Rate Drops to 6.3% … But …
May 2, 2014
The US Bureau of Labor Statistics reports ” … the unemployment rate fell by 0.4 percentage point to 6.3 percent in April.” This is the largest monthly drop in unemployment for years.
However, if you read further in the report, you find “…(t)he labor force participation rate fell by 0.4 percentage point to 62.8 percent in April….” In other words, the drop in unemployment is not because of a net gain in new workers hired, but because of a net loss of workers available. Actual unemployment is much higher than 6.3%. Full data here.
Another report released last week by the BLS states: “Of the nation’s 80.4 million families, 80.0 percent had at least one employed member in 2013.” This means, of course, that 20% of families did NOT have anyone employed. One fifth of the nation’s families had to rely on government or charity for room and board.
Combine this news with the low labor participation rate and the dismal economic growth rate of the first quarter of 2014, and you have a picture very different that the unemployment rate seems to show us.