The unemployment rate declined to 6.2 percent in July, down from 6.4 percent in June. The reduction did not occur because there were more people working. In fact, there were 260,000 fewer employed in July than in June. The decline in unemployment occurred because of a continued reduction in the number of people counted in the labor force. The civilian labor force dropped by 556,000 in July. People who have not looked for work over the past 4 weeks are not counted in the unemployment totals. These are defined as “discouraged workers.” Some of these workers would start looking again if the economy picked up; their absence from the unemployment statistic understates the actual number of people who want jobs but cannot find them.
A July 29 segment on the Newshour with Jim Lehrer pointed out that certain trends over the past 20 years have taken more people out of the labor force. Adjusting for those changes, correspondent Paul Solman estimated that if discouraged workers and some others not now counted were added to the labor force totals, unemployment would come close to the 10.8 percent rate of 1982, the record for unemployment after the depression of the 1930s. Click here to see the transcript for that report.

The official unemployment rates declined slightly for adult men, teenagers, and Hispanics or Latinos in July, with a slightly larger reduction among African Americans. Rates were unchanged for adult women and whites. The number of non-farm jobs dropped by 44,000 in July. For details, go to the Bureau of Labor Statistics website.

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