Friday, September 7, 2012

AWFUL! Why The Unemployment Rate Dropped: Labor Participation Rate Is At Fresh 31 Year Lows

From Curious why the unemployment rate dropped from 8.3% to 8.1%, even as just 96,000 jobs were added? The labor participation rate declined from 63.7% to 63.5%, the lowest since 1982. It means that somehow in August the labor force declined by 368,000 people, which is a paradox since according to the household survey 119,000 jobs were lost in August. The combination of these two factor magically resulted in a drop in the unemployment rate.