The US unemployment rate fell by a tenth of a percentage point from July to August to 6.1%, level with June and down from 7.2% in August 2013. But what does that mean?
As always, a deeper look at the numbers is in order.
Before the Bureau of Labor Statistics published the August jobs report on Sept. 5, Diana Furchgott-Roth, director of Economics21 at the Manhattan Institute and a former chief economist at the Department of Labor, suggested finer points for examination. Here they are, in seasonally adjusted numbers:
• Labor force participation rate: 62.8% last month vs. 62.9% in July and 63.2% in August 2013. Between 2003 and 2008, the rate was about 66%.
• Broader measures of unemployment, which include categories omitted in the headline rate, labeled U-3. That rate accounts only for unemployed workers. The broader U-6 measure includes discouraged workers and part-time workers who want full-time jobs. The U-6 rate in August: 12.0%, little changed. In the past decade, Furchgott-Roth says, the difference between U-3 and U-6 has increased from 4 to 7 percentage points.
• Revisions to prior job numbers, which always happen. The number for the August gain in nonfarm employment is 142,000. Combined changes for June and July amounted to 28,000 fewer jobs created than previously reported.
• Aggregate hours worked in the economy, the preliminary August index for which is 108.8, with 2002 as the base year. The index was 108.7 in July and 106.5 in August 2013.
• Teen unemployment rate: 19.6% in August, down from 20.2% in July and 21.0% in June. The rate a year ago August: 22.6%.
• Long-term unemployed, which includes people out of work 27 weeks or more. The rate fell to 31.2% in August from 32.9% in July and 32.8% in June. It was 38% in August 2013.
The US job story is brightening. Many people still aren't looking for jobs. Many part-time workers want full-time employment. In a plodding recovery, though, all signs of improvement are welcome.
(From the subscription area of www.ogj.com, posted on May 30, 2014; author's e-mail: [email protected])