Last Week’s Jobs Report

The headline is that the jobless rate fell in November to 7.0% from October’s 7.3%, and the participation in the labor force (the number of Americans working at some capacity or looking for work) rose in November to 155,294,000 from October’s 154,839,000.

However, the headline ignores the fact that the Democrats’ government shutdown for much of October led to a large number of Federal employees being furloughed (some 450,000 were out of work for the duration), which both contributed to October’s rise in unemployment and that lowered number in labor force participation.  Comparing November’s data with September’s, the month immediately preceding that shutdown, provides a much more useful comparison.  In September, the unemployment number was 7.2%; the November still seems a significant drop.  However, September’s labor force participation was 155,559,000 Americans: that force had shrunk by 265 thousand Americans by the end of November.  The lower participation contributed significantly to the headline unemployment rate “drop.”

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