Some good news this morning from the Bureau of Labor Statistics:
The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total
nonfarm payroll employment rose by 203,000, the U.S. Bureau of Labor Statistics
reported today. Employment increased in transportation and warehousing, health care,
and manufacturing. […]Total nonfarm payroll employment increased by 203,000 in November. Job growth averaged
195,000 per month over the prior 12 months. In November, job gains occurred in
transportation and warehousing, health care, and manufacturing.
These numbers are better than the consensus prediction so economists and analysts.
But I wouldn’t make too much of the unemployment rate, which is determined from an ongoing survey of households. The rate was 7.8 percent a year ago, but the data show that the labor force participation rate has declined from 63.6 percent to 63.0 percent over the last year (it actually rose slightly from October to November). That’s a key reason for the decline in the unemployment rate.
At the same time, the U.S. is adding more than enough jobs each month to keep pace with population growth.
It’s also worth adding that the participation rate might continue to decline for a number of years because of demographic reasons, especially the retirement of baby boomers.
As always, great commentary and graphs at Calculated Risk, including:
There you can see the long-term trend of the declining labor force participation rate.