Oct 7, 2017 Employment Explosion
June 26, 2017 Why's the FED Panicking?
May 25, 2017 LFPR anyone?
Apr 26, 2017 What's up with the FED?
March 10, 2017 Feb Employment Situation
Oct 10, 2016 Tax Burden
Aug 1, 2016 Here Comes the Debt
June 26, 2016 Moribund US Economy
June 16 2016 Labor Update
Mar 10, 2016 Spring Renewal for Labor Markets?
Feb 21, 2016 GDP Gap
Feb 16, 2016 FED and Monetary Policy
Jan 19, 2016 Employment Gap Age Groups LFPR
Jan 10, 2016 A look at the Employment Situation
Dec 30, 2015 Fed Funds Rate up 25 Basis points...so what?
Dec 15, 2015 Fed Funds on the rise? Has Yellen 'Fell-in'?
Oct 15, 2015 Labor Markets Seven years of misery
Oct 6, 2015 Sept: Horrible Month for Labor
Sept 30, 2015 The FED: Interest Rate Angst
Sept 11, 2015 FED on the Monetary Policy Front
July 31, 2015 Trade and Foreign Exchange Rates
July 20, 2015 Economic Growth?
July 10, 2015 Labor Picture by Age Group
July 2, 2015 Disastrous Month in Labor Rpt
June 19, 2015 Minimum Wage - Income Distribution
Jun 5, 2015 Encouraged Worker Effect
May 8, 2015 Updated Employment Situation for April
May 4, 2015 Languishing Labor Markets
Apr 7, 2015 LFPR Doldrums on the Labor Front
March 8, 2015 Less than Zero Interest Rates - Trade War
2014 Articles
2013 Articles
2012 Articles
2011 & 2010 Articles
Dec 23, 2011 Revisionist History Depression
Dec 10, 2011 Depression & Now Part 1
Dec 5, 2011 Lies, Damned Lies, Statistics
Nov 16, 2011 Taxes Part 2
Nov 8, 2011 Taxes Pt 1
Nov 1, 2011 Demographics
Oct 12, 2011 Fed-FOMC
Oct 6, 2011 Fed's Operation Twist
Sep 30, 2011 What Price Bailouts?!
Sep 9, 2011 Trade Deficit - States
Sept 3, 2011 Unemployment Ongoing Challenge
August 22, 2011 Restricting Oil Supply
August 11, 2011 Credit Rating-Taxes
August 8, 2011 QE3? What to do?
Aug 5, 2011 Employment Update
August 1, 2011 Competitive Free Mkt Capitalism
July 26, 2011 Cradle of Democracy
July 16, 2011 Capital Ratios
July 10, 2011 Unemployment Again
July 1, 2011 QE2 Over-Apres Moi, le Deluge
June 11, 2011 Unemployment
June 8, 2011 Net Worth Collapse
May 18 2011 Credit Collapse '08-'10
May 15, 2011 Fed Miracle-Mayhem
May 10, 2011 Unemployment
Mar 30, 2011 Puppet Show
Mar 18, 2011 Locked-in-Effect
Mar 10, 2011 Bummer Days
Feb 12 2011 Inflation by Decontenting
Feb 6 2011 Unemployment
Jan 14 2011 Money Supply
Jan 12 2011 Trade Deficit
Jan 6 2011 Printing Press Myth
Dec 18, 2010 College Pricing
Dec 7 2010 Debt & Deficits
Dec 2, 2010 J-Laffer Curve
Sep 24 2010 Competition
Sept 23 2010 Trade Deficit China
About us
Links of Interest
Straw Poll
Definitions & Miscellaneous

Economic Newsletter for the New Millennium

February 6, 2011

Donald R. Byrne, Ph.D.

Associate Editor
Edward T. Derbin, MA, MBA

Download Current Blog




Here are the numbers, you decide.

Why doesn't Unemployment feel like it is falling

Data extracted from Department of Labor, Bureau of Labor Statistics

February 5, 2011

Employment Situation – January 2011



Additional information about the household survey can be found at www.bls.gov/cps/documentation.htm  


1) Civilian Noninstitutional Population = 238,704,000

“Persons not in the labor force combined with those in the civilian labor force constitute the civilian noninstitutional population 16 years and over. (There is no upper age limit.)”


2) Civilian Labor Force = 153,186,000  

“The civilian labor force is the sum of employed and unemployed persons.  Those not classified as employed or unemployed are not in the labor force.”  


3) Civilian Labor Force Participation Rate = 64.2

(153, 186,000 divided by 238,704,000 = 64.2%)

“The labor force participation rate is the labor force as a percent of the population, and the employment-population ratio is the employed as a percent of the population.”  


4) Employed = 139,323,000

“People are classified as employed if they did any work at all as paid employees during the reference week; worked in their own business, profession, or on their own farm; or worked without pay at least 15 hours in a family business or farm. People are also counted as employed if they were temporarily absent from their jobs because of illness, bad weather, vacation, labor-management disputes, or personal reasons.”


5) Unemployed = 13,863,000

“People are classified as unemployed if they meet all of the following criteria: they had no employment during the reference week; they were available for work at that time; and they made specific efforts to find employment sometime during the 4-week period ending with the reference week.  Persons laid off from a job and expecting recall need not be looking for work to be counted as unemployed.  The unemployment data derived from the household survey in no way depend upon the eligibility for or receipt of unemployment insurance benefits.”


6) Unemployment Rate = 9.0% (U-3)

“The unemployment rate is the number unemployed as a percent of the labor force.”  


From January 2001 through December 2008, the Labor Force Participation Rate averaged 66.2%.  From January 2009 through January 2011, the Labor Force Participation Rate averaged 65.0%.

Is a profound change occurring in our culture to cause the Labor Force Participation Rate to fall this drastically?  Recall the profound change ushered in by the large scale introduction of women into the workforce during World War II, i.e., witness the late "Rosie the Riveter," aka, Geraldine Doyle http://www.freep.com/article/20101231/NEWS08/12310337/Geraldine-Doyle-inspiration-Rosie-Riveter-dies.  

Or is it that the so-called discouraged worker is not being counted correctly? 


Let’s take another look…

The Average Labor Force Participation Rate from Jan 2001 through Dec 2008 = 66.2%

Overlaying the 66.2% on the Civilian Noninstitutional Population of 238,704,000 we arrive at a Civilian Labor Force of 158,107,000

The difference between the official Civilian Labor Force (based on 64.2% participation rate 153,186,000) and the adjusted Civilian Labor Force(based on 66.2% participation rate of 158,107,000)  = 4,921,000

If we add the 4,921,000 to the ranks of the unemployed, the unemployment number increases to 18,784,000 and the U-3 version of the unemployment rate swells from the official 9.0% to 12.3%.

Comparing Unemployment adjusted for Labor Force Participation Rates

FYI - official U-6 is 16.1%.  Using the same rationale, you could simply tack on another 3.3%, pushing the adjusted U-6 to 19.3%  

Additional note: since “the sum of the employed and the unemployed constitutes the civilian labor force,” it’s a straight addition of the 3.3% (9.0% +3.3% = 12.3% at the 66.2% Labor Participation Rate)


U-3 = Total unemployed, as a percent of the civilian labor force (typically reported [official] unemployment rate).


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.


From a previous newsletter…

2010 Volume Issue 1

September 23, 2010



A stubborn and severe recession is exacerbating the dismal job outlook and causing accelerated early retirements from the labor force, seeking long term disability status, and an increasing reality of very long duration unemployment. 



Disability and Social Security Ranks Swelling