The Unemployment Picture: What does 8.1 % really mean?

There is more to the jobs picture in America than just the unemployment rate. This number is based on the amount of people currently seeking work. It does not reflect people who have dropped out of the workforce or people who are taking jobs below their level of skill. It does not show which jobs are being filled, who is creating jobs and how many. It also does not reflect the rate of turnover, new hires vs. people leaving companies.

For April 2012, the unemployment rate across the nation was 8.1%. Since 2002, the highest national, monthly unemployment rate was in October 2009 at 10%. From 2002 until October 2008, when the financial crisis was in full swing, the rate never hit 6.5%. Since the rate peaked, 8.1% is the lowest it has been.

Based on quarterly data, the job market shed a net of 9.297 million in the Great Recession which lasted 9 quarters, from the first quarter of 2008 through the first quarter of 2010. Since then, 2.571 million net jobs were gained back (through the third quarter of 2011). This reflects 27.65% of the jobs lost. At this rate, the number of U.S. jobs would return to its pre-recession level sometime in the third quarter of 2015, which reflects 21.7 straight quarters of job growth.

The percentage of working-age Americans out of the labor force in April 2012 was around 36% (not including the institutionalized population). Out of the total U.S. population, only 45.24% are employed. This means that the average working person in America is supporting their self and 1 dependent, whether that is directly, through charity, or through taxes.

In April, 41.3 percent of the unemployed had been jobless for 27 weeks or longer. Long term unemployment is a large problem, as work skills erode over time and it becomes difficult to re-enter the workforce. Another 7.9 million Americans were working part-time involuntarily.

Additional Resources:

Bureau of Labor Statistics Unemployment Rates: http://data.bls.gov/timeseries/LNS14000000

Bureau of Labor Statistics Business Employment Dynamics: http://www.bls.gov/news.release/pdf/cewbd.pdf

Bureau of Labor Statistics Employment Status of Population: http://www.bls.gov/news.release/empsit.t01.htm

Bureau of Labor Statistics Employment Situation April 2012: http://www.bls.gov/news.release/pdf/empsit.pdf

CBS News: http://www.cbsnews.com/8301-505123_162-57427667/unemployment-rate-drops-job-creation-stagnates/

 

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