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July Unemployment Rate fell 0.1% to 9.1% because 193,000 unemployed workers stopped looking for work

Posted by FactReal on August 5, 2011

Obama promised that government spending would “stimulate” the economy and create millions of jobs. When will Obama understand that Obamanomics has failed: Massive government spending and interventionist regulations have done nothing to improve the nation’s economy.

The unemployment rate is still above 9%

Via Bureau of Labor Statistics, RedState, AP/Sweetness&Light, Heritage

  • The unemployment rate fell 0.1% (from 9.2% to 9.1%) partly because 193,000 unemployed workers stopped looking for work. So they are no longer counted as unemployed.
  • The number of unemployed persons (13.9 million) and the unemployment rate (9.1 percent) changed
    little in July.
  • The net increase in new jobs was 117,000: There were 154,000 jobs added to the private sector, while the public sector shed 37,000.  As such, the number of unemployed declined from 14.087 million in June to 13.931 million, lowering the unemployment rate from 9.2% to 9.1%.
Behind the numbers:
  • Size of civilian labor force:  So why is this report such bad news?  Well, if you shrink the size of the pool, the unemployment rate will actually go down.  While a net-117,000 jobs were added in July, 193,000 long-term unemployed persons left the labor force.  In May, the civilian labor force stood at 153.693 million.  Now, there are only 153.228 in the labor force, a shrinkage of 465,000 people.  Of the remaining 153.228 in the labor force, there were 139,296,000 people working in July, down 38,000 from 139,334,000 in June.  There are 490,000 less workers than there were in May.  This is where you get the 9.1% figure.
  • Size of working age population:  While the number of people looking for jobs has shrunk, the population continues to grow rapidly.  The size of the civilian noninstitutional population grew from 239.489 million in June to 239.671 in July, an increase of 182,000.  Consequently, the employment-population ratio now stands at 58.1%, the lowest level since 1983.  We need almost 200,000 new jobs just to break even, yet we only gained 117,000 new jobs, and actually lost 193,000 from the labor force.  This is a recipe for disaster
  • Comparison to January 2009-Obama’s inauguration date: In January 2009, the labor force stood at 154.185. This means that a net 957,000 people have left the labor force since Obama was inaugurated.
Employment data are based on sample surveys: “Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month,” the Government conducts monthly sample survey.
Employment reports present statistics from two major surveys:
The Current Population Survey (household survey) interviews individuals and reports data that is used to determine the unemployment rate. The household survey provides information on the labor force, employment, and unemployment that appears in the “A” tables, marked HOUSEHOLD DATA. It is a sample survey of about 60,000 households conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics (BLS).

The Current Employment Statistics survey (establishment survey) is the larger and usually more reliable survey. It surveys businesses about its payroll and employees. Its data is used to estimate the number of jobs created or lost in each industry as well as hours worked and wages. The establishment survey provides information on employment, hours, and earnings of employees on nonfarm payrolls; the data appear in the “B” tables, marked ESTABLISHMENT DATA. BLS collects these data each month from the payroll records of a sample of nonagricultural business establishments. The sample includes about 140,000 businesses and government agencies representing approximately 440,000 worksites and is drawn from a sampling frame of roughly 9 million unemployment insurance tax accounts. The active sample includes approximately one-third of all nonfarm payroll employees.

The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.
More definitions here.

– Bureau of Labor Statistics: Employment Report – July 2011 (PDF) and Archived News Releases


One Response to “July Unemployment Rate fell 0.1% to 9.1% because 193,000 unemployed workers stopped looking for work”

  1. Buck Crosby said

    Thats the only way the unemployment numbers will ever come down as long as Obama is in office . Someone needs to determine the real numbers and blast them across the nation . The same thing needs done for rate of inflation INCLUDING food and energy . Americans need the truth to make intelligent decisions . Anyone in the mainstream media found helping to hide or cover up these truths needs to be prosecuted for defrauding the entire American population .

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