(People's World) -- It reminded me of the movie version of 1984 where the government of Oceania keeps announcing the improving figures in the production of everything from pig iron to chocolates. Only this time it was the U.S. government this morning announcing that the ever-improving jobless rate has dropped now to 3.8 percent.
What they did not announce was yet another in the continuing monthly drops in labor force participation. “As a result, the unemployment rate fell for the wrong reasons,” wrote Elise Gould, an economist with the Economic Policy Institute this morning. What Gould is saying is more people continue to leave the labor force every month than are finding a job every month.
If the government continues to calculate the unemployment rate the way it does now even if every single person over the age of 16 in the United States was out of work we could, in theory, have an unemployment rate of zero percent! The rate then does not tell us much about how many able-bodied people are actually without a job.
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