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Behind The Numbers
-- October 4, 2002
The dip in the unemployment rate for September shocked most economists -- including us! After all, the number of jobs in the U.S. shrank for the first time in five months. Companies eliminated a net 43,000 jobs from their payrolls in September. And new jobless claims have been over the 400,000 level for six consecutive weeks. Those numbers just don't translate into declining unemployment. On the contrary, they tell us that the labor market is getting tighter and tighter.
So, we dug a little deeper. A closer look shows that the rate dropped mostly because more teenagers entered the workforce -- perhaps because their parents can't afford as much these days. But those types of jobs don't replace the high-paying jobs their parents lost in industries such as telecom, airline, and manufacturing. What it means is that more people are marginally employed -- not gainfully employed. And that is NOT a recipe for a robust economic recovery!
Payrolls Drop Amid Uneven Recovery