Another Unemployment Rate Fairy Tale

Just so there's no confusion.

The BLS reported that the closely followed "headline" (U-3) unemployment rate fell to 8.3% in January. This represented a decline of 0.2 percentage points from the previous month's level and the lowest level since February 2009. So, why isn't this good news?

The problem isn't just that the employment report wasn't good news, it's that the employment report wasn't even news. Rather, it was simply the latest monthly installment of the long-running story contained within President Obama's so-called "economic recovery": falling labor force participation. For the past 31 months, discouraged workers have been dropping out of the labor force in unprecedented numbers.

At the end of the recession (June, 2009), the labor force participation rate was 65.7%. In January 2012, it was 63.7%. The difference between these two numbers represents 4.8 million people who have given up on looking for work.

If the labor force participation rate for January 2012 had remained the same as it was in December 2011, the unemployment rate would have risen by 0.2 percentage points to 8.7%, rather than falling by 0.2 percentage points to 8.3%.

However, this comparison does not even begin to show the damage being done by Obamunism.

If the labor force participation rate had remained where it was when Obama took office (65.7%), the unemployment rate for January 2012 would have been reported at 11.0% rather than 8.3%. In January 2009, unemployment stood at 7.8%.