Unemployment Declines When Almost 350,000 People Leave Job Market

May 7, 2012 by
Filed under: Economic News, Employment 

Some might take the declining employment numbers as good news, but when you look at the actual cause of the April 2012 unemployment rate drop from 8.2% to 8.1% you then see the numbers have been quite fudged. Heritage.com reports that the labor force participation rate is at a 30 year low. Despite the 115,000 jobs added in April (lower than the estimate of 165,000), 342,000 left the job market and will no longer be counted as even looking for employment.

So, these people are not unemployed, they just aren’t interested in employment due to retirement, sickness or most likely, long term unemployment for more than 99 weeks. After you stop collecting unemployment from the government, and have still not found a job, you will drop off unemployment rolls and be in some kind of suspended animation I guess. Who knows what the current political regime thinks you are?

While many economists expected the labor force participation rate to go up, the troubling sign is that it is still dropping since the recession officially began in December of 2007. The rate at that time was 66% and has since dropped to 63.6% with the latest statistics from April 2012.

Below is a chart that shows the decline back from January of 2001. These are troubling statistics no doubt:

Labor Force Participation Rate

Source and chart from Heritage.org


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