Big Drop in Ohio Unemployment Rate Due to Disappearing Workers (Same Goes for Rest of U.S.)

How is the Ohio economy really doing? Great find by Jason Hart of Media Trackers:

Ohio’s unemployment rate paints a misleading picture of the state’s economy, an Opportunity Ohio report and separate Media Trackers analysis reveal. The unemployment rate reported by the U.S. Bureau of Labor Statistics (BLS) dropped from 10.6 percent in July 2009 to 7.2 percent in August 2012, but the change resulted from a shrinking labor force as opposed to strong job growth.

In a paper released October 23, Opportunity Ohio founder Matt Mayer wrote, “when accounting for all the workers who are unemployed and who have left the labor force, the true unemployment rate in Ohio is most likely 9.3 percent.”

Indeed, this is an issue I have been highlighting at the national level.

When President Obama took office, the labor force participation rate was 65.7% vs. 63.6% last month. If the LFP had just stayed steady all of this year, the unemployment rate would still be in the mid 8% range.

When the unemployment rate fell sharply under Reagan over the same period — from 9.2% in September 1983 to 7.3% in September 1984 — the LFP rose to 64.1% from 63.5%. Optimistic Americans were pouring into the job market and finding jobs. The economy was booming — and would continue to boom for a generation.

Bottom line: The decline in the unemployment rate under Reagan was a sign of underlying economic strength. Under Obama, the decline in the unemployment rate is a sign of underlying economic weakness. 

  1. flownover

    Why do we allow the media to continue to fool us with these numbers that result from moving the goal posts . As you point out, the number of people that aren’t even in the job force anymore is substantial. The number of underemployed, number in part-time jobs, quality of jobs, amount of hourly comp when combined with benefit value , all these are vastly changed. 

    But the MSM just beats the lowest number like a constant tattoo, because we all know they would using a different metric if POTUS were GOP. But if that were the case, they wouldn’t find room on the front page for all the Libya stories that would, no doubt, be screaming at us from the headlines . 

    U 6  baby, that is the number we should have started with and stayed with.

  2. Pilli
    flownover: 

    U 6  baby, that is the number we should have started with and stayed with. · 1 minute ago

    Edited 0 minutes ago

    Absolutely!  Plus we need to understand who the “dropouts” are.  Aren’t they people whose unemployment benefits have expired?  Why are we using unemployment benefits as the benchmark of who is unemployed and who isn’t?

  3. Recovering Liberal

    These unemployment numbers are brought to you by the faux data geeks who religously follow the 538 Blog.

  4. Jason Hart

    Thanks for the shout-out!