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Labor force declines for December and for 2013

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The Bureau of Labor Statistics released its monthly employment situation summary for Dec. 2013 on Jan.10. The data reflected the changes from November as well as year over year changes from Dec. 2012. The picture drawn is of an American economy in a grinding decline.

The employment situation continued its recent decline in the period from Nov. 2013 to Dec. 2013. The civilian labor force dropped by 347,000 while the number of Americans not in the labor force rose by 525,000. The difference? The entire population increase for the civilian population for the month, 178,000.

The number of unemployed fell by 490,000 from November and the number of working Americans rose by 143,000. The remaining unemployed left the labor force. Despite adding population, the number of Americans working or looking for work fell.

The civilian population rose by one percent from Dec. 2012 to Dec. 2013, just under 2.4 million people. In that same period, the civilian labor force declined by 0.4 percent, or by 548,000. Fewer Americans were working or looking for work at the end of 2013 than were at the end of 2012.

The number of unemployed fell by 1.9 million while the number of those employed increased by nearly 1.4 million. Those are great numbers without context. The context is that 2.9 million Americans left the labor force in that same period. The number of Americans no longer working or looking for work increased 3.3 percent during the year.

In Dec. 2012, 36.4 percent of the civilian population were not in the labor force. By Dec. 2013, that percentage had increased to 37.2 percent. Despite a one percent increase in population, a one percent increase in employed Americans and a 15.7 percent reduction in unemployed Americans, the employment situation was worse in Dec. 2013 than the year before. The labor force participation rate for Dec. 2013 was the lowest since 1977 at 62.8 percent. Just 59 Americans were working for every 100 Americans in the population.

The Dec. 2013 unemployment rate was 6.7 percent. The data shows that most of the unemployed are not obtaining jobs, but leaving the workforce. A dropping unemployment rate is only good news when accompanied by both an increase in the number employed as well as an increase in the labor force.

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