The reporter on NPR breathlessly gushed about how the unemployment rate fell to 7.7 percent.
They then cut to someone who attibuted the fall in the unemployment rate to ‘jobs picking up in construction.’
(Around 48,000 according to BLS)
Don’t get me wrong, I agree that a gain of 236,000 jobs in February is a significant improvement over the paltry 119,000 reported in January.
But it is nowhere near the 363,000 needed each month to bring our official unemployment rate back down into the neighborhood of 6 percent.
What the reporters are not explaining to you is that in February, the adult population grew buy 165,000, yet the labor force actually decreased 130,0000 as 295,000 additional adults chose not to look for work.
Over a hundred thousand more adults fell out of the labor force in February than found jobs!
LABOR FORCE PARTICIPATION RATE FEB 2013
What does this mean?
It means that the real unemployment rate U-6 is 14.3 %
14.3 percent is the real number for total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force. Source- Bureau of Labor Statistics.
So that 7.7 % figure the breathless news reporters are giving you is wrong.
The reporters are understating by about 50% the actual unemployment rate.
7.7 percent is 54 percent of 14.2 percent.
46% is a fairly large margin of error or “understatement.”
There is hope.
There are jobs for people with skills in advanced manufacturing.
Here is a link to a quick video where I show a list of job openings posted at Cuyahoga Community College Advanced Workforce Center.
If you can take two semesters of skills training at a local community college, you could find yourself working in advanced manufacturing by the second semester.
Labor Participation Rate Graph
Professor Peter Morici of University of Maryland contributed some sensemaking to this post.
[…] have been talking about this issue for some time- here, here, here, here are some of our most recent […]