The Bureau of Labor Statistics said that seasonally-adjusted unemployment rate dropped to 8.2% from 8.3% last month, and the broader U-6 unemployment/underemployment rate dropped to 14.5% from 14.9%, while the economy added only 120,000 jobs overall and 121,000 jobs added in the private sector. According to Fox Business, the consensus among economists was for the unemployment rate to remain at 8.3% and for 203,000 jobs to be added, based on ADP’s estimate of 209,000 new private-sector jobs and Gallup’s mid-March unadusted unemployment rate drop of 0.3 percentage points.
To flip the question Ed asked last month, how did the unemployment rate drop when job growth was anemic? It’s a muddled mixture of good news and bad news. While the number of unemployed (at least those who had looked for work between mid-February and mid-March) dropped by 133,000 to 12,673,000 and the number of those not in the labor force but wanting a job dropped by 79,000 to 6,299,00 the number of those in the labor force fell by 164,000 to 154,707,0000. Moreover, on a seasonally-unadjusted basis, the number of those forced to part-time work due to economic conditions fell from 8,100,000 to 7,700,000.
The news appears to be a bit better going forward. Gallup noted their end-of-March unemployment estimate dropped to a seasonally-adjusted 8.1%, and Oregon, Washington and Wisconsin will be ending the last several weeks of extended unemployment benefits due to declining unemployment rates.
Update: The simplest measure of unemployment is to count the number of people who want a job but are out of work, regardless of whether they last searched for work in the prior 4 weeks (measured by the official U-3 rate), prior year (measured by the U-5 rate), or longer than a year ago, and divide that into that number plus the number of people employed. That measurement, unfortunately, has only been possible since 1994.
For March, that would be 18,972,000 (the 12,673,000 officially unemployed and part of the workforce plus the 6,299,000 who are not part of the workforce but who want a job), divided into 161,006,000 (the 154,707,000 officially part of the workforce plus the 6,299 who want jobs). That would put the “simple” unemployment rate at 11.8%.
The good news – that is a tick lower than February’s 11.9% “simple” unemployment rate. The bad news – that is higher than any point between 1994, when this measure was first possible, and March 2009.
Update: Courtesy Conservative4ev in the comments, Rasmussen answered the question of why so many people dropped out of the workforce, and it’s not due to retirement:
After holding steady for the past year, the number of Americans who know someone who’s given up looking for a job out of frustration with the current market is up to 48%.
A new Rasmussen Reports national telephone survey shows that 43% of Adults don’t know someone in this situation. But the number of Americans who know someone who has given up on the job market is up from 43% in February and ties the highest result measured in regular tracking since 2010. This finding hovered around 40% for most of 2011.