Friday, August 01, 2003

Unemployment Drops, Jobs Decline, Labor Force Declines

The good news it that the unemployment rate has dropped to 6.2%. The bad news is that this is entirely driven by people dropping out of the labor force. Last month Elaine Chao said that the rising unemployment number was a good thing because it was driven by people, drawn to renewed economic opportunities, re-entering the labor force. I'm sure this month she'll interpret people dropping out of the labor force as a good thing as well.

Here's the AP:

WASHINGTON -- The nation's unemployment rate declined to 6.2 percent in July as nearly half a million discouraged Americans stopped looking for a job. Payrolls were cut for the sixth month in a row, suggesting that businesses remain cautious and want to keep work forces leans despite budding signs of an economic revival.

The Labor Department's report Friday pained a picture of a job market that remains stubbornly sluggish and continues to frustrate people looking for work.

The economy lost 44,000 jobs in July. While that's an improvement from the 72,000 shed in June, economists were hoping that positions would actually be added. They were forecasting payrolls to go up by around 10,000.

Although the jobless rate dipped to a two-month low of 6.2 percent from a nine-year high of 6.4 percent in June, much of decline's July represented the exodus of 470,000 discouraged people who abandoned job searches because they believed no jobs were available.

And, here's the BLS data.