Labor Force Rate Hits Carter-Era Low
Even with job creation expectations lowered to an unserious 180,000, the Obama Recovery was unable to deliver. With only a measly 180,000 jobs expected in August, an even measlier 169,000 jobs were created. What is worse, though, is that the Labor Force Participation Rate (LFP) continues to artificially lower our nation's unemployment rate, which fell to 7.3%. Unfortunately, this happened only because the LFP fell to its lowest level since 1978.
August's LFP was 63.2%. The LFP was 65.7% when Obama became president:
In July, the Bureau of Labor Statistics estimated that there were 144,285,000 Americans with jobs. In August, the BLS estimated there were 144,170,000--a decline of 115,000.
The LFP measures the percentage of working-age people currently participating in the labor market. This can mean that they are either employed or actively seeking employment. When the LFP drops, it means that people have left the labor market. Some retire, some give up looking for work out of sheer frustration at not being able to find a job.
Since the unemployment rate is based only on those participating in the labor market, if people give up looking for work and the LFP drops, the unemployment rate drops. In other words, if everyone looking for a job gave up the search for work and went on welfare, the unemployment rate would drop to zero.
With our LFP now at Carter-era levels, no one believes this is due to people retiring. Especially with almost 9 million people on disability (an all-time record) and food stamp rolls also hitting record highs.
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