Money Minute: Why doesn’t the jobless rate go down? [Video]
When is a recovery not a recovery? Conservative critics of the Obama administration say it’s when people may be finding jobs but the unemployment rate stays put.
About 227,000 jobs were added last month, according to the Labor Department, but the jobless rate remained stuck at 8.3%.
Republican presidential candidate Rick Santorum told Bloomberg Television that the economy is recovering “in spite of” President Obama’s policies.
“Certainly a quarter of a million jobs, roughly, being added is a positive step forward,” he admitted, while adding that the administration “has consistently seen, you know, bad job reports because of bad policies that have led to those job reports. And eventually, you know, the economy does recover, in spite of the headwinds that this administration has put in its place.”
In reality, a quarter of a million jobs, roughly, at a time like this, is pretty darn impressive. And most economists view the hiring as a sign of slow but steady progress in restoring a pulse to the economy.
As for the unemployment rate, that’s a little trickier. It measures the percentage of the labor force that is out of work but still actively looking for new gigs.
To get the jobless rate, the number of officially unemployed is divided by the total labor force. In February, the size of the labor force increased, perhaps as discouraged workers started looking for work again. As the labor force swelled, so did the number of new jobs necessary to drop the unemployment rate.
And that’s how you get a static rate while more people are finding work.
When is a recovery not a recovery? Only when gloom-and-doomers insist on saying it isn’t. All evidence to the contrary notwithstanding.
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