Is The Unemployment Rate Dropping?

The economy is adding jobs. Nonfarm payrolls rose by 120,000 in March and have been positive since the end of 2010. President Obama called the 120,000-increase in payrolls "welcome" news and added, it is "clear to every American there will still be ups and downs along the way and that we've got a lot more work to do."

The unemployment rate remains high at 8.2 percent but is falling. Employment rose in manufacturing, food services and drinking places, and health care, but was down in retail trade. You can see the positive trends below.

US Change in Nonfarm Payrolls Chart

US Change in Nonfarm Payrolls data by YCharts

However, if you look at the labor force participation rate below (blue line). The participation rate is collapsing as employees stop looking for work. As people stop looking for work, the BLS removes them from the official unemployment numbers. The unemployment rate may be headed down but not true unemployment.

US Labor Force Participation Rate Chart

US Labor Force Participation Rate data by YCharts

Read more articles about: Economic Watch  

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