The US lost 247,000 jobs in July, fewer than expected. The unemployment rate dropped from 9.5% to 9.4%. How can jobs lost translate to reduced unemployment? The number of people actively looking for work also fell – reducing the unemployment rate.
Don’t blame the Obama administration for this one. The unemployment rate has been calculated using this method since the 1950’s. If you stop looking for work you are no longer considered unemployed. If you are working part time because you can not find a full time position you are considered employed.
The unemployment rate for July including all labor “under utilization” is 16.8%.
Feel better now?
U.S. Bureau of Labor Statistics
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