The party conventions are over, the signs and funny hats are overflowing trashcans in Tampa and Charlotte, and reality returns to center stage in the form of Friday’s jobs report. It’s rare that a single data report matters much. After all, we can’t project a trend from a single data point. The report that the economy added a mere 96,000 jobs in August is an exception. No matter that the unemployment rate fell to 8.1 percent from 8.3 percent—that is only because 368,000 more workers dropped out of the work force, and the labor force participation rate dropped to its lowest level in 30 years. For every worker who found work, four simply stopped looking and joined the ranks of what economists call “discouraged workers.”
“Consider some startling numbers,” invites the Lindsey Group in its latest client bulletin. “The number of adult males eligible to work in the civilian economy has expanded by one million over the last year. But the number declaring themselves not interested in working has expanded by roughly the same amount. Overall, if the labor force participation rate was the same as it was a year ago the unemployment rate would still be 9.1 percent – unchanged over the past year.”
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