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Friday, December 02, 2011

Unemployment Drops To 8.6 As 315,000 Americans Left The Labor Force

By Susan Duclos

The good news is the "official" unemployment rate dropped to 8.6 percent in the month of November, while the U6 unemployment dropped to 15.6 percent.

U-6: Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

As always, I remind you of the portion of the United States Department of Labor Bureau of Labor Statistics, Economic News Release, Employment Situation Summary, which shows 2.6 million are not included in the "official" totals because they did not look for work in the four weeks prior to the survey.

In November, 2.6 million persons were marginally attached to the labor force, about the same as a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

That is the good news.

The bad news is the reason for the 0.4 percent drop in the unemployment numbers.

The civilian labor force participation rate declined by 0.2 percentage point to 64.0 percent.

Bloomberg explains:

The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.

You’d like to see the unemployment rate coming down when people are coming into the job market, not disappearing,” James Glassman, senior economist at JP Morgan Chase & Co. in New York, said in an interview on “Bloomberg Surveillance” with Tom Keene. “That’s probably exaggerating the trend in unemployment.”

Emphasis mine.

More bad news within the good news unemployment report is that there was a 0.6 percent increase in the long-term unemployed figured, which are people that have been unemployed for 27 weeks or more. That number rose from 42.4 percent to 43 percent.

Short Summary: The official unemployment dropped by 0.4 percent, long term unemployment rose by 0.6 percent and the civilian labor force participation rate declined by 0.2 percent.

Once again, as is usual in our unemployment pieces we list areas still at or above the official national average for unemployment are:

Alabama- 9.3%
Arizona- 9.0%
California- 11.7%
Connecticut- 8.7%
D.C.- 11.0%
Florida- 10.3%
Georgia- 10.2%
Idaho- 8.8%
Illinois- 10.1%
Indiana- 9.0%
Kentucky- 9.6%
Michigan- 10.6%
Mississippi- 10.6%
Nevada- 13.4%
New Jersey- 9.1%
North Carolina- 10.4%
Ohio- 9.0%
Oregon- 9.5%
Rhode Island- 10.4%
South Carolina- 10.5%
Tennessee- 9.6%
Washington- 9.0%

Data obtained from Bureau of Labor Statistics on the Local Area Unemployment Statistics page. (Right side)

[Update] Some addition notes found as updates over at Hot Air about these numbers, historically speaking:

The 315,000 seasonal drop in the civilian labor force is almost unprecedented for a November. Since 1982, there have been only 7 times the labor force has dropped between an October and a November, and only 3 times has the drop been even close to this steep. In 2002, 273,000 departed the labor force, in 2008, 332,000 departed the labor force, and in 2009, 227,000 departed the labor force.

Related to that, the number of people not in the labor force, but who want a job now, rose to a seasonally-adjusted 6,595,000, the highest since the first month that statistic was tracked, January 1994. As a percentage of the civilian population, the 2.74% rate is the highest since June 1996