Why the Jobless Numbers Went Up -- Not Down
{{#rendered}} {{/rendered}}It's official. The new jobless figures are out and we learned this morning that the nation's unemployment rate climbed to 9.8 percent last month. -- It has remained at least at 9.5 percent for a record 16 months. Today, reacting to the news, many hosts and analysts on cable news are shocked at the worsening unemployment numbers. But economists have been anticipating the increase for sometime. The depressing problem is that the increase didn't occur for the reason we thought that it would.
Economists thought that the unemployment rate would rise because as some of the Americans who had completely left the labor force began to look again for jobs. Remember, people are only counted as unemployed if they are actively searching for work. But millions of Americans were no longer listed as unemployed over the last couple of years because they simply gave up looking for work.
Unfortunately, the bad news today is that not only is the number of unemployed rising, the number of people who have given up and left the labor force is also still going up.
{{#rendered}} {{/rendered}}More than 500,000 Americans have left the labor force since September -- a shocking rise in such a short period of time for a so-called "recovery." If you combine the number of unemployed Americans with those workes who are not in the labor force, the total is by far the highest on record. In fact, it is 7.2 million higher than when Obama became president. And while things started improving for the first several months of this year, 2 million Americans have either become unemployed or left the labor force since April. A diagram showing how the numbers have deteriorated over the last year is available here.
Not surprisingly, while many of those who have left the labor force have completely given up looking for work, about 4 million say they want a job now. They have simply not been actively looking for a job because they had gotten too discouraged or could only find part-time work. Add that to figure the 15.1 million unemployed and you have over 19 million people who want a full-time job -- that a 1 million increase since June.
The Obama administration and the media also fail to note that even the anemic job growth numbers may even be worse than reported. There are two different methods that the Bureau of Labor of Statistics uses to estimate the total number of jobs. The one yielding the estimated 39,000 new jobs is from a survey of businesses, where firms employing about a one-third of workers are surveyed. The other method is the "Household" survey of about 60,000 households. It showed that an estimated 173,000 Americans lost their jobs in November, that is on top of 330,000 Americans losing their jobs in October. This Household survey is what is used to calculate the unemployment rate and is the only survey that can be used to measure how many people are leaving the labor force.
{{#rendered}} {{/rendered}}The untold story that isn't being covered is how many Americans have stopped actively looking for work. At this writing, the number of unemployed plus those not in the labor force is at 99.83 million, just below 100 million and 10 million above what it was just two years ago. President Obama seems posed to claim the dubious distinction of breaking through that 100 million barrier.
John R. Lott, Jr. is a FoxNews.com contributor. He is an economist and author of "More Guns, Less Crime"(University of Chicago Press, 2010), the third edition of which was published in May.