The Homa Files

The headline: unemployment rate drops to 6.3%

Boom times in America, right?

Hmmm.

Here’s what has me scratching my head …

Let’s work through some arithmetic.

According to the BLS, the civilian labor force dropped by 806,000 in April … to about 147.5 million.

Of the 147.5, about 9.3 million were reported as unemployed … 9.3 divided by 147.5 equals 6.3%

Let’s pretend that the 806K drop-outs were still being counted in the labor force ….

The labor force number gets bumped to 148.3 million … and the number of unemployed goes to 10.1 million.

The unemployment rate?

Well, it goes to 10.1 divided by 148.3 … or 6.8% …  a 1/10th increase versus March … not a 4/10ths drop.

Hmmm.

====

BTW: Heard an interesting explanation for the steep decline in the labor force number.

In order to get unemployment benefits, claimants must say that they’re looking for work … so, they get counted in the labor force — whether they’re looking or not.

When their UE benefits expire, they can be more honest and admit that they’ve been liberated from work and aren’t really looking … so, they don’t get counted in the labor force number.

Makes sense to me.

#HomaFiles

Follow on Twitter @KenHoma >> Latest Posts

This entry was posted on May 5, 2014 at 11:11 am and is filed under BLS, Economy, Employment - Jobs, Unemployment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.