Vince Bellino ’15, Finance Editor, Christian Tannous ’14, Staff Writer
The Bureau of Labor Statistics announced on Feb. 7 that unemployment has dropped to 6.6 percent, its lowest level since October 2008. While initially it paints a brighter portrait of the labor market, further analysis proves the statistics to be anything but clear. Much of the deceptiveness can be attributed to how the headline unemployment number is calculated; a process to which it only can make sense of how unemployment can decrease despite consecutive months of sluggish job growth.
The government conducts a monthly sample survey called the Current Population Survey to measure the extent of unemployment in the country. The problems with the current method are it does not consider the workers who quit the job search and it often does not match up with the payroll job counts that comes from a survey of employers.
The new job figures for December and January are 75,000 and 113,000 respectively, which was considerable less than the analyst’s expectations of nearly 200,000 per month. If these disappointing numbers seem too small to drop unemployment to a pre-crisis low, it is because they are. A statistic the government will not announce is the civilian labor face participation rate which fell .2 percentage points to 62.8 percent, it is lowest since the late 1970s. As a benchmark, the pre-crisis participation rate was about 66 percent.
As we all will be college graduates soon and enter into the workforce, this number will be of increasing concern. Jobs have become increasingly harder to find as the costs of education have spiraled, leaving many graduates underemployed with massive amounts of debt. All of this should leave you with no worries, however as the Bureau of Labor Statistics projects faster growth for jobs requiring post-secondary education in the next several years. Hopefully their estimates have more bearing than their unemployment statistics.