The unemployment officially stands at 7.8 percent, but if the figure included those who dropped out of the labor force during the recession and its ensuing recovery, the rate would likely stand at 9.3 percent, The Wall Street Journal reports.
The U.S. unemployment rate fell to 7.8 percent in September from 8.1 percent in August, as employers added a net 114,000 new jobs to their payrolls.
Households reported that total employment rose by 873,000 in September, largely due to gains in part-time work, the Bureau of Labor Statistics reported recently.
Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
The unemployment rate measures the number of people in the labor force who are out of work but are actively looking for jobs.
Those who get discouraged and quit looking for work aren’t counted, but factor those back into the equation and the rate would be higher than 7.8 percent.
Including those who quit looking for work after losing their jobs in the recession and ensuing sluggish recovery — and only those workers and not everyone who has left the labor force before late 2007 — the rate would likely stand at 9.3 percent, factoring in historical shifts in the labor market.
That’s lower than many estimates of an 11 percent rate, but well above the official figure, The Journal analysis finds.
“Adding back everyone who’s left the labor force makes little sense. Long before the recession, the participation rate was declining due to factors unrelated to the business cycle. People are entering the labor force later as more people go to college. The Baby Boom generation is starting to retire. And the flood of women into the work force, which drove a long rise in labor force participation in the second half of the 20th century, has slowed,” according to The Journal.
“Any serious effort to assess the job market has to take such trends into account.”
The drop in the headline unemployment rate sparked cries of data manipulation from conspiracy theorists, including Jack Welch, who argued the Obama administration tinkered with the numbers ahead of the election, a charge many on both sides of the aisle dismissed.
Still, the number improved due to increased demand for part-time workers and not due to a rising number of payrolls being created, and GOP presidential nominee Mitt Romney was quick to pounce on the number as one that reflects a labor market that remains seriously weak.
“If you just give up and say, ‘Look I can’t go back to work, I’m just going to stay home,’ why, you’re no longer part of the employment statistics,” Romney said recently, according to the Washington Post.
“So it looks like unemployment is getting better, but the truth is, if the same share of people were participating in the work force today as on the day the president got elected, our unemployment rate would be around 11 percent.”
Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
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