U.S. unemployment drops to 7.2% How can unemployment drop when the economy isn’t adding enough jobs? Because…

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Labor Force Statistics from the Current Population Survey

U.S. unemployment dropped to 7.2% today. The month of September added 144,00 jobs when analysts expected 180,000. How can unemployment drop when the economy isn’t adding enough jobs? This is due to because there’s low levels of labor participation rate. Labor Participation is people who are actively searching for jobs in the market, when job seekers get discouraged they no longer look for work, they are not participating in the market. Those who have not looked for work within the past four weeks are not only no longer counted among the unemployed, they are also removed from the labor force. As you can see Labor Participation has dropped to 63.2 and thus job seekers are not motivated to find jobs, thus dropped the unemployment rate.

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Categories: Business Today, Capital Markets

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