Mixed jobs report: How can the unemployment rate drop so much when the economy adds so few jobs?

Commentary about business and finance.
Feb. 4 2011 4:34 PM

Less Unemployment, Fewer Jobs

How can the unemployment rate drop so much when the economy adds so few jobs?

(Continued from Page 1)

Other one-off changes need to be accounted for as well. In January, the Labor Department adjusts its estimates of population size, meaning December and January can't be fairly compared in the same way November and December can. According to the BLS, between December and January, the number of employed workers increased by 117,000, but the number of unemployed workers fell by a massive 622,000. That implies that discouraged jobless workers simply fell out of the labor force—but the BLS says the size of the labor force did not change. In short, the numbers do not add up terribly well, at least not this month.

We'll know more in February and March, when there may be further adjustments to the numbers released today and when month-to-month data become easier to compare. But one way or another, the employment situation is not good. There are fewer Americans with jobs now than there were in January 2000—though there are 11 million more workers now. End of story? We're still digging ourselves out of a very deep hole.

Advertisement

Like Slate on Facebook. Follow us on Twitter.