Shrinking U.S. Labor Force Keeps Unemployment Rate From Rising

A Labor Department report released on Friday showed the US economy unexpectedly lost 85,000 jobs in December while the jobless rate was unchanged. However, as The Consumerist notes, the reason why the national unemployment rate hasn't gone up is because "people are giving up hope and dropping out of the labor force entirely.":

The percentage of Americans taking part in the labor force is the lowest it's been since the mid-'80s, and over 900,000 people are no longer looking for work because they don't think any is available.

“About 1.7 million Americans opted out of the workforce from July through December, representing a 1.1 percent drop that marks the biggest six-month decrease since 1961, the Labor Department report showed. The share of the population in the labor force last month fell to the lowest level in 24 years.

The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- rose to 17.3 percent in December from 17.2 percent.

The number of discouraged workers, those not looking for work because they believe none is available, climbed to 929,000 last month, the most since records began in 1994.”

The problem in this recession is not the unemployment rate, but the average length of time that each worker has been unemployed.

Last month, I cited another sad statistic with regards to long-term unemployment:

According to data released by the Department of Labor, long-term unemployment is soaring:

The number of Americans out of work for 27 weeks or more reached 5.9 million last month, the most on records dating from 1948. That's 18 percent more than just three months ago, when the total was just below 5 million.

Related Post: Broader measure of US unemployment stands at 17.5%