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Friday, September 07, 2012

Why a Drop in the Unemployment Rate Is Tragic | Breakout - Yahoo! Finance

Why a Drop in the Unemployment Rate Is Tragic | Breakout - Yahoo! Finance

 August fell to 8.1% compared to 8.3% in July. If you like your news positive and grossly oversimplified stop reading now; the details on the report are hideous.
Consider:
  • Nonfarm Payroll Employment rose by 96k compared to estimates of 125k - 130k and a far cry from the average growth of 139k in 2012. Last year the average monthly gain was 153k.
  • July's NFP number was revised lower from 163k to 141k.
  • The greatest gains came from the food services and drinking sector. In other words, from waiting tables or bartending. These are some of the most brutal, lowest paying jobs extant.
  • The labor force participation rate fell to 63.5%, the lowest read in over 30 years. When this number goes down so does the stated unemployment rate. To get to 8.1% unemployment, 368,000 Americans had to drop out of the labor force.

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