The Number of Long-Term Unemployed Continued To Grow in November

“Total nonfarm payroll employment increased by 178,000” in November 2016, according to the Bureau of Labor Statistics. This number is generally reported as the number of new jobs added to the U.S. economy in a given month, though we pointed out in October how this is misleading when not put in the context of how much the working-age population grew during the same time.

The estimated 178,000 increase surpassed Wall Street’s projected 175,000, though only negligibly. However, the working-age population increased by 219,000, and the number of people employed in November only rose by 160,000. Meanwhile, the size of the labor force – those working or actively looking for work – shrank considerably, by 226,000.

The number of unemployed did decrease significantly, dropping by 387,000. This caused the unemployment rate to drop to “its lowest level since August 2007.”  

But if the working-age population grew more than the number of newly employed, and most of those who were unemployed in October did not find work in November, how did the unemployment rate go down? Because almost 450,000 people dropped out of the U.S. labor force entirely, which means they no longer count as “officially unemployed” even if they do want a job.

The labor participation rate – the percentage of the working-age population who are in the labor force – remains at a forty-year low, where it has been stuck for over two years. Where once a decline in the unemployment rate was a good economic indicator, since 2009 it has been more likely a sign that the number of chronically unemployed Americans is increasing.

The number of 18- to 64-year-olds not in the labor force in November was 48.97 million, 51.8% of the total.

ERIC RUARK is the Director of Research for NumbersUSA

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