What's wrong with this month's Employment Situation?


Basically this month's Employment Situation report looks decent. 140,000 new jobs, unemployment rate down. What's wrong with that? Here's the key. To stay at the same unemployment rate, with the same labor force participation rate, you have to create about 120,000 new jobs every month. We created about that with the 140,000. So, for the unemployment rate to drop, the labor force participation rate had to decline, because of people leaving the labor force due to other factors, like becoming discouraged. Here's the quote.
After rising in July, the labor force participation rate edged down to its June level of 66.0 percent. (See table A-1.)

In the aggregate, we have more jobs than we did last month. But at the individual level, it's still just as hard as it was before.

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