It's just a month until the election, and the Labor Department gave the Democrats some good news. According to the new labor statistics released on Friday, the official U.S. unemployment rate has dropped from 6.1% in August to 5.9% in September. That marks the first time since July of 2008, right after the economy blew up in the Bush administration, that the unemployment rate has been below 6%. In spite of the Republican obstruction and refusal to help with job creation, President Obama has now gotten the official unemployment rate significantly below the figure that he inherited from President Bush.
But while the new lower rate may (or may not) help in the coming election, no one should celebrate too much. The economy is still faltering, and an unemployment rate of 5.9% is still far too high. In a healthy economy, the figure considered "full employment" would be about 3.0-3.5% unemployment (since economists figure that's the percentage of workers that would normally be in flux and changing jobs). And prospects of getting the unemployment figure below 4% still seem remote.
In addition, we cannot fully place the credit for the 0.2% drop in unemployment just on new job creation. The number of employed workers rose only by about 232,000 in September, and that's not enough to account for the 0.2% drop in unemployment. The size of the civilian work force (those with jobs or actively seeking jobs) also shrank in September by about 97,000 people. That means another 300,000 or so people have given up trying to find a job, stopped looking, and are no longer being counted by the government as being unemployed (even though they would love to have a job if they just knew where to find one).
Here are the relevant numbers for September:
OFFICIAL UNEMPLOYMENT RATES (DEMOGRAPHIC)
Adult Men...............5.3%
Adult women...............5.5%
Teenagers (16 to 19)...............20.0%
Whites...............5.1%
Blacks...............11.0%
Hispanics...............6.9%
Asians...............4.3%
Less than HS diploma...............8.4%
HS graduate...............5.3%
Some college...............5.4%
Bachelor's degree or more...............2.9%
SIZE OF THE CIVILIAN WORK FORCE
155,862,000
OFFICIAL NUMBER OF UNEMPLOYED PEOPLE
9,262,000
OFFICIAL UNEMPLOYMENT RATE
5.9%
MARGINALLY-ATTACHED WORKERS WHO ARE NO LONGER COUNTED BY THE GOVERNMENT AS BEING UNEMPLOYED (undoubtably an undercount)
2,226,000
MORE REALISTIC NUMBER OF UNEMPLOYED PEOPLE (official + marginally-attached)
11,488,000
MORE REALISTIC UNEMPLOYMENT RATE
7.37%
NUMBER OF UNDEREMPLOYED WORKERS (working part-time because full-time work is not available)
7,103,000
NUMBER OF UNEMPLOYED / UNDEREMPLOYED WORKERS
18,591,000
UNEMPLOYMENT / UNDEREMPLOYMENT RATE
11.93%
