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April unemployment rate falls as workers leave labor force

The Bureau of Labor Statistics released the April Employment Situation Summary on May 2. The unemployment rate in April fell to 6.3 percent. Non-farm payrolls increased by 288,000. That is the BLS headline but that is not the story.

Destitute man leaning against vacant store
Dorothea Lange / Franklin D. Roosevelt Library / public domain

In April, the number of Americans not in the labor force set an all-time record. Over 92 million Americans were not working or looking for work. The labor force participation rate reached its lowest level of the year at 62.8 percent. The number of those employed dropped 73,000 to 145,669,000.

The number of discouraged workers, who have stopped looking for work, jumped 12 percent from March to 783,000. The state of the economy forced 7.2 million workers to hold multiple jobs and 7.5 million to work part-time. The number of Americans not in the labor force who wanted jobs in April remained unchanged from March at 6.1 million.

The number of Americans in the civilian non-institutional population has increased by 2.3 million people since April 2013. The civilian labor force has increased just 62,000. The number Americans not in the labor force has increased 2.1 million since April 2013.

The BLS generates the non-farm payroll by using a different survey from that used to measure the unemployment rate. The Establishment Survey often varies wildly from the data reported in the Household Survey. For example, from March to April the number of employed Americans fell by 73,000 yet the BLS states that the economy added 288,000 jobs.

The number of employed Americans reached its record high in Nov. 2007, with 146,595,000. At that time, 62.9 percent of the civilian population was employed. Since then, the civilian population over age 16 has increased by 14.5 million while the number of employed Americans has fallen by 996,000. Just 58.9 percent of the population is working and paying taxes.

Using the data from the Household Survey, the employment data from April 2014 looks terrible. The drop in the unemployment rate is due to Americans leaving the labor market or, with major implications for the future, never entering the market to begin with. Measured from 2007 or from April 2013, the jobs report for the United States released today is not something to be celebrated.