Unemployment Drops in July…for all the Wrong Reasons

By Ray Pinard | August 28, 2013

Here’s an interesting article from our friends at the Josiah Bartlett Center for Public Policy

According to the data released by the Bureau of Labor Statistics, the unemployment rate dropped by .2 percentage points, to 7.4%. The Establishment Survey Data showed the creation of 161,000 non-farm pay roll jobs. On the surface it looks like a fairly decent report: unemployment down and job growth, while not stellar, is enough to keep up with natural population growth.

Digging into the data however, what once may have been a mediocre report quickly turns gloomy. The drop in unemployment was not the result of people getting jobs; rather, they gave up looking for work and left the workforce entirely. The number of unemployed decreased by 263,000 while the number of those no longer in the labor force increased by 240,000.

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