True Unemployment Rate 11% or Higher in 49 of the Last 50 Months
Photo Credit: Reuters
That gradual decline reflects a historic drop in labor force participation. Without that drop, joblessness would be 11.3%, holding at 11% or higher in every month but one in the last 50 months.
To be considered unemployed, a person has to be out of work but actively looking. So when people give up the job hunt, they reduce unemployment — even if the number of people working hasn’t risen.
At the start of the recession in December 2007, the labor force participation rate was 66%. It fell sharply, tumbling to 62.8% in October, a 35-year low. It rose slightly to 63% last month.
The actual labor force has declined by 217,000 so far this year, even with nonfarm payrolls up by 2.1 million.
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