When the previous month’s job report is announced it makes a lot of headlines. The data is published by the Bureau of Labor statistics monthly and although the figures published are facts, they still seem to generate some debate. This debate tends to be fueled by politics and for now we will leave the political discussion for the talking heads on cable and the real internet bloggers.
I just wanted touch on the two numbers that are on either end of the jobs report spectrum, and that is the all-important unemployment rate of 4.6% which is at its lowest level in about nine years. On the surface a low unemployment rate is a good thing, it makes for a good headline and means that the economy is doing well and Americans are working resulting in a tight labor market. However then I read that the labor participation rate also declined down to 62.7%, meaning that 95,055,000 Americans are out of the labor force and those who are not looking for work are not categorized as “unemployed” therefore there is no impact on the unemployment statistic.
There seems to be endless ways to slice and dice this data based on demographics, geographies, industries etc. I am not an economist so I won’t pretend to be one, hopefully there is an economist reading this and they’ll shed some light in the comments section.
I simply just wanted to point out that while the unemployment rate is at its lowest in nine years, the labor participation rate is also at a record low. So just how tight is the labor market today? Do you think it feels like a 4.6% unemployment market?
