The overall unemployment rate has dropped.
It currently stands at 7.9 percent, which is the lowest rate since the pandemic hit. The peak rate was 14.7 percent. This is the fifth month in a row that economists have seen a drop. The drop seems to have happened faster than they expected.
Unfortunately the job market is not entirely as promising as these figures suggest. Furlough has been a major player in the last few months. People on furlough from a position are counted as recall unemployed. On the other hand, those who have no job lined up are jobless unemployed. Recently jobless unemployment has overtaken recall unemployment. Recall fell to 2 percent and jobless rose to 5 percent. The issue with this is that those in recall-unemployment tend to remain without work for longer periods of time.
Labour force participation has dropped.
Reports also indicate that the drop in unemployment may have more to do with people leaving the labour force than people finding work.
Not everyone who does not have a job is counted as unemployed.
“People are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work,” according to The Bureau Of Labour Statistics.
This means if a person has given up looking, or cannot work, they will be seen as dropping out of the labour force. (This does not include recall-unemployed/furloughed workers).
From March to April, America had the biggest drop in labour force participation in history. It dropped by 2.5 percent. It had only gone back up by half this decline before it started dropping again. In September, the rate dropped by 0.3 percent and hit 56.6 percent. The drop has disproportionately impacted women who are now at the lowest rate of labour force participation since 1987.
Whilst the overall rate of unemployment has dropped, it seems that America’s is still full of people who need work.