Unemployment and Employment Both Drop: Not a Lot of Good News

About the decrease in U3 unemployment (the ‘strict’ measure) from 9.2% to 9.1% (which, of course, beats the alternative increase): well, that’s the good news. The bad news is that the employment rate actually dropped 58.2% to 58.1%. Among men, we hit another all-time historical low. So how do you have a lower unemployment rate and a lower employment rate?

It’s very simple. People with jobs are employed (duh). Unemployed people are:

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:


  • An employer directly or having a job interview
  • A public or private employment agency
  • Friends or relatives
  • A school or university employment center

•Sending out resumes or filling out applications
•Placing or answering advertisements
•Checking union or professional registers
•Some other means of active job search

But a lot of people can fall through the cracks: the long-term unemployed, people holding out for a better offer, or are ‘discouraged.’ Basically, what the figures show is that more people are just giving up on finding work all together. That has the perverse effect of lowering unemployment by shrinking the denominator. (This drop in employment is entirely due to men dropping out).
This is not the change we were waiting for.

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1 Response to Unemployment and Employment Both Drop: Not a Lot of Good News

  1. berke says:

    useful entry thanks

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