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Saturday, March 5, 2011

February Unemployment Falls to 8.9%

The Labor Department released crucial unemployment data this Friday, stating that the unemployment rate fell to 8.9% in February. This has been the lowest level for the unemployment rate since April 2009. However, there is a dent to this number, as the labor force participation rate fell to 64.2%.

The labor force participation rate measures how many individuals either have a job or are seeking a job. If someone is not actively seeking a job, then they are removed from the statistic, which can give a pseudo-statistical number for the unemployment level.

A three year look on the unemployment rate vs. the labor force participation rate.
Source: Labor Department and The Wall Street Journal.

More simply, people who are not actively seeking a job are not included in the unemployment rate, which may be a problem due to the fact that it is not an accurate measure of the amount of people who are simply discouraged from searching due to the economy.

For example, if the labor force participation today stood at the same level as before the recession, then the jobless rate would be a disheartening 11.5% this last February, as opposed to the 8.9% released by the labor department. This goes to show that clearly many Americans are simply discouraged from seeking employment--until more of these individuals are added back into the labor force participation equation, we would not be on our way to a full recovery.

Another important statistic is added payrolls per month. 192,000 payrolls were added this February, which may seem like a lot, but is actually far from what the U.S. requires in order to have a strong recovery. Nigel Gault, a chief U.S. economist at IHS Global Insight is quoted in the Wall Street Journal stating: "To get a strong recovery, you'd want to be adding 300,000 payrolls a month. We're clearly a long, long way from that."

However, with all this being said, it is still a good indicator that we are on our way to a full recovery--albeit in a slow and sluggish manner.

36 comments:

  1. It's gonna take a while to get there but I'll take any good news regarding the economy. thanks for sharing!

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  2. What is the real unemployment rate though? The US calculates it in a way that makes it seem better then it actually is. They only count people who are looking for a job and collecting benefits. They don't count the underemployed or people who just gave up looking.

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  3. Yeah, I'm unemployed and not collecting benefits, so I don't count. Go figure. And more people have temporary or part time jobs that don't make ends meet for them.

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  4. i've recently watched inside job and i dont trust rates or any numbers gov released

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  5. That's excellent news on the US docket!

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  6. do you happen to know if the labor participation rate includes people that are retiring?

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  7. Same figures in Finland. They're trying to lower it to 0% in next 4 years. Good luck there :D

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  8. We're recovering economically for sure, but why aren't we doing so more quickly? Why are there so many people financially hurting all across America still? It might have something to do with stubbornness of the left in spending in programs that generate few jobs instead of cutting back on what is unnecessary. But that's just my two cents.

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  9. Hmmm I certainly need to get a job.

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  10. If you ask me, I think legalizing marijuana in the USA will solve any economical problem that may arise. Its the biggest cash crop in the world. Imagine all the money being made can be invested into offering universal healthcare and other benefits.

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  11. econemy is in the ass right now in germany. we even have people working for free, so they dont fall into the statistics for unemployment rates

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  12. I helped bring this rate by one single person. You all should thank me.

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  13. dont worry, im helping to get it back up haha

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  14. the same should happen here in germany, too...

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  15. inside job made me understand what caused the meltdown lol. finally.

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  16. Unemployment numbers lie quiet a bit.

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  17. I'm still unemployed (unless you count full time student). :(

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  18. We'll get there. And as an Finance major I approve this post. Followed.

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  19. There are ALWAYS way more unemployed than the stats say.

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  20. good news, to bad oil prices are rising, gonna be painfull for the cripling economy

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  21. Wish I could find a job right now! Its really hard and theres just nothing out there!

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  22. great news! we're slow recovering

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  23. another great post, keep em coming.

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  24. "HaigoR said...

    If you ask me, I think legalizing marijuana in the USA will solve any economical problem that may arise. Its the biggest cash crop in the world. Imagine all the money being made can be invested into offering universal healthcare and other benefits."

    Agreed. This really should be done, it's such an easy alternative to buying it illegal.

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  25. well, I think that all the people without job should be there even if they are not looking for one.

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  26. Basically it just means competition is getting stronger. Bring your A game to this life.

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  27. It's tough out there. I do like how the official statistic doesn't count those who got so frustrated they've quit looking; politics is all about perception!

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  28. fun times... glad I incurred so much debt on a degree just to enter the working world in this climate :/

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  29. I'm currently unemployed I really hope that the job market improves some more.

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  30. Things are looking up!
    But did you really publish all of this 10 hours ago? That's what my thing says. Oh well, I'm enjoying reading it all.

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