According to the report by the Bureau of Labor Statistics the official unemployment rate remained at 7.6%. In some quarters the report is seen as good news despite the rate stasis because private sector job growth increased by 202,000 as government jobs decreased by 4,000.
Unemployment steadied at 7.6 percent for the month, as nonfarm payrolls grew by 195,000, according to a closely watched Labor Department report Friday. Economists expected 165,000 more jobs and a decline in the unemployment rate to 7.5 percent.
Stock market futures, already surging ahead of the news, added to gains, while Treasury yields jumped to two-year highs and the dollar slid against the euro.
What may be lost in speculative euphoria is that the workforce participation rate is still at historic lows.
The civilian labor force participation ratio rose to 63.5 percent, still its lowest level since 1979; the employment-population ratio rose to 58.7 percent. If the participation rate had remained at the pre-recession level, the unemployment rate would now be 9.6 percent.
Some 36.7 percent of the 11.7 million people who are officially unemployed—4.3 million—have been out of a job for 27 weeks or more. Those long-term unemployed represent 2.8 percent of the labor force. Before this recession, the highest these numbers had ever reached in 65 years were 26.0 percent and 2.6 percent, respectively. That occurred 30 years ago, in June 1983.
In other words, some are permanently unemployed. In the case of non-seniors this is a tragedy as not only are they losing income, but also their skills are being eroded. Not to mention the stigma they will have when applying for new jobs. Seniors, or those close to senior status, may be able to wait it out until reaching the social safety net, though Social Security does not go as far as it used to.
While Wall Street may be cheering the real economy is still stuck in neutral.
Image by EugeneZelenko under Creative Commons license.