The Trouble With Unemployment Math
The Washington Post today runs a timely reminder that the nation’s unemployment rate will likely rise even as hundreds of thousands of jobs start being created.
Jul 31, 2020238K Shares6.6M Views
The Washington Post today runs a timely reminderthat the nation’s unemployment rate will likely rise even as hundreds of thousands of jobs start being created. The reason is simple: The Labor Department equation used to crunch the jobless rate doesn’t consider those folks who’ve been so discouraged by the job market that they’ve stopped looking for work altogether. As the economy recovers, though, those folks will re-enter the official jobless pool, hiking the unemployment rate even as businesses are hiring. The Post provides more detail:
“„The number of people looking for jobs rose by more than 200,000 last month compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created and that they’re optimistic about their prospects.
“„But the supply of new jobs — 162,000 in March, the biggest monthly increase in three years — will accommodate only a fraction of the unemployed. Some economists say the jobless rate will not recede to pre-recession levels near 5 percent for four more years.
If anything, this is reminder that the official jobless rate is always misleading — and that lawmakers (not to mention journalists) would do better to recognize the broader numbers when tackling the topic.
Dexter Cooke
Reviewer
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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