Number of Unemployed Rises by 76,000

AEI Online | Published on November 5, 2010

By Henry Olsen

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Today’s labor report contains mixed messages. While the monthly survey of employers shows job growth, the monthly survey of American households shows job losses. If average Americans are to be believed, the employment situation got worse, not better, in October.

The household survey (a monthly survey of 60,000 American households) is the one that determines the unemployment rate, and the data from this survey remain bleak. According to this survey, 76,000 more Americans are unemployed this month than last. The unemployment rate, which measures the percentage of adult Americans who are actively seeking jobs but do not have one, remained steady at 9.6 percent only because the number of Americans seeking work dropped by 254,000.

A truer picture of the employment situation can be seen by looking at a lesser-known statistic produced by the government, the civilian employment-population ratio. This number could be called the employment rate, as it measures the percentage of all adult Americans who have a job.

The October report pegged the employment rate at 58.3 percent, down two-tenths of a percent since September and the lowest in months. Since the start of this summer, there are 840,000 more adult Americans who could conceivably look for work, but 58,000 fewer people are employed. About 220,000 of these Americans are looking for work and can’t find it, but the overwhelming majority are simply not looking at all.

Even if the data from the employers survey is accurate, it shows an economy barely producing enough jobs to accommodate our growing population. The net gain of 151,000 jobs reported today works out to an annual job gain of about 1.8 million people. That sounds like a lot until you realize that in the past year America’s adult population has risen by about 2 million Americans. On average about 1.3 million of these would enter the labor force, meaning the annualized increase of 1.8 million workers from today’s reports would only bring about 500,000 of the 14.8 unemployed Americans back to work.

The employment rate has fallen farther and faster in this recession than at any time in the last thirty years and it continues to drop. Today’s report shows that recovery is still a long ways off.

Henry Olsen is a senior fellow at the Ethics and Public Policy Center.