Jobs Reports Don’t Tell the Whole Story about Unemployment Trends

According to experts from the Job Creators Network, monthly unemployment numbers are not telling the whole story when it comes to workforce trends. The bigger issue being overlooked may be “the hollowing out of the labor force.”

In the last fiscal year, the percentage of able-bodied adults who dropped out of the workforce hit a low not seen since 1977.

“The labor force participation rate was at 63 percent or below for at least 11 of the 12 months of the recent fiscal year,” said Douglas Haugh, president of Mansfield Oil. “We haven’t seen that since 1977 and it shows worker engagement in the economy is stuck on a ‘new normal’ of low expectations.”



A measure of the percentage of work-eligible adults participating in the workforce, the labor force participation rate was 62.7 percent for September, according the monthly update released this morning by the U.S. Department of Labor (See JCN video below). The report also showed the unemployment rate for September creeping down to 5.9 percent, and 248,000 new jobs added.

“Worker participation was hovering around 64 percent or better just three years ago, and stayed in the 66 percent range or better for two decades before 2009,” said Haugh, who is a member of Job Creators Network. “That rapid drop of just three percentage points from the historical norm effectively hides 6 million adults who dropped out and are no longer counted as unemployed in the official stats.”

The participation rate has now measured 63 percent or less for six consecutive months. The only break in the trend over the last fiscal year was a 63.2 measurement during March, and that was followed by a sharp plunge to 62.8 percent in April.

“Those missing workers could fill every job in Illinois, one of our largest state economies, and they’ve vanished over a very short period of time” Haugh said. “We’re overstating the health of our economy until we recognize and fix what caused them to leave.”