That is exactly what appears to have happened during the month of January.
Bloomberg: The U.S. jobless rate unexpectedly fell in January to the lowest level in 21 months, while payroll growth was depressed by winter storms.
Unemployment declined to 9 percent from December’s 9.4 percent, the Labor Department said today in Washington. Employers added 36,000 workers, short of the 146,000 median gain projected by economists in a Bloomberg News survey. [MORE]
Frankly, this doesn’t make a lot of sense. If only 36,000 jobs were added and 600,000 people stopped being unemployed, then the labor force should show a significant contraction. The lower overall rate makes sense if 600,000 people left the workforce, but not if the workforce remained the same. Otherwise, we’d have to conclude that 36,000 jobs represents 0.4% of all employment in the US.
Looking at the A-6 table, which compares numbers January 2010 to January 2011 (not seasonally adjusted), we can see that the unemployment rate for those without disabilities has dropped from 10.4% to 9.7%. The number of non-disabled adults outside the work force has grown substantially in that period, from 62.8 million to 64.7 million. That far outstrips population growth and indicates that people are still leaving the work force in large numbers. In the A-16 table for the same period (not seasonally adjusted), the number of people outside the workforce has grown from 83.9 million to 86.2 million, again showing a large increase.
The topline rate number looks better, but it also looks increasingly irrelevant. The Department of Labor shows that the average monthly growth of jobs over the last 12 months has been 97,000, not enough to keep up with population growth. That’s the key measure, and it’s simply not getting any better, nor any more consistent. [MORE]
The administration will no doubt tout the decline (even if it is crazy math). The danger for the administration is that risk appearing very out of touch. This is because unemployment is a real thing that can be quite painfully felt and pointing to a bunch of facts and figures won't make that pain go away.
Via: Hot Air