Last month, the
unemployment rate plunged from 9.0% to 8.6%. Great news, right? Wrong.
The United States only added 120,000 jobs last month, which did not even keep up with the 172,000 in population growth. All other things remaining the same, the unemployment rate should have risen.
All other things did not remain the same, however. Even though the total population rose by 172,000, the civilian labor force declined by 315,000 from the prior month. Civilian labor participation dropped from 64.2% to 64.0%. This means, 487,000 Americans stopped seeking work altogether and either went on government disability, to school or into poverty.
The unemployment rate went down only because our available work force is shrinking out of despair.