Every month when the jobless numbers come out, Obama critics take pains to point out that the "official" number is very misleading.
One of the major reasons is that the published unemployment rate does not include such "hidden" workers as those working part time who would like to work full time, and those who have given up looking for work.
Reuters has a good piece today on the latter:
Economists, analyzing government data, estimate about 4 million fewer people are in the labor force than in December 2007, primarily due to a lack of jobs rather than the normal aging of America's population. The size of the shift underscores the severity of the jobs crisis.
If all those so-called discouraged jobseekers had remained in the labor force, August's jobless rate of 8.1 percent would have been 10.5 percent.
The jobs crisis spurred the Federal Reserve last week to launch a new bond-buying program and promise to keep it running until the labor market improves. It also poses a challenge to President Barack Obama's re-election bid.
The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one has fallen by an unprecedented 2.5 percentage points since December 2007, slumping to a 31-year low of 63.5 percent.
"We never had a drop like that before in other recessions. The economy is worse off than people realize when people just look at the unemployment rate," said Keith Hall, senior research fellow at the Mercatus Center at George Mason University in Arlington, Virginia.
The participation rate would be expected to hold pretty much steady if the economy was growing at a normal pace. Only about a third of the drop in the participation rate is believed to be the result of the aging U.S. population.
The economy lost 8.7 million jobs in the 2007-09 recession and has so far recouped a little more than half of them.
Economists say jobs growth of around 125,000 per month is normally needed just to hold the jobless rate steady.
Given the likelihood that Americans will flood back into the labor market when the recovery gains traction, a pace twice that strong would be needed over a sustained period to make progress reducing the unemployment rate.
Last month, employers created just 96,000 jobs.
Some areas of the country are better off than others jobs-wise, but that last factoid from Reuters should give us pause. There have only been two months during the Obama administration that have seen more than 250,000 jobs created. If there ever is anything like a normal recovery, the real unemployment rate will skyrocket once the discouraged workers are counted again by the BLS.