August Unemployment Rate Improves Thanks to People Giving Up
WASHINGTON (AP) — U.S. employers added 169,000 jobs in August and many fewer in July than previously thought. Hiring has slowed from the start of the year and could complicate the Federal Reserve’s decision later this month on whether to reduce its bond purchases.
The Labor Department said Friday that the unemployment rate dropped to 7.3 percent, the lowest in nearly five years. But it fell because more Americans stopped looking for work and were no longer counted as unemployed. The proportion of Americans working or looking for work fell to its lowest level in 35 years.
July’s job gains were just 104,000, the fewest in more than a year and down from the previous estimate of 162,000. June’s figure was revised to 172,000, from 188,000. The revisions lowered total job gains over those two months by 74,000. Employers have added an average of just 148,000 jobs in the past three months, well below the 12-month average of 184,000.
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I’ve been saying this for months, the unemployment rate is falling, but not for the reason people assume. If the total labor force is composed of 10 people and 2 are unemployed, that’s an unemployment rate of 20%. When one of those gives up and stops looking, the unemployment rate IMPROVES to 11% ! Too bad the news media didn’t properly inform Americans about this when it mattered.