For Immediate Release: Friday, August 5, 2011
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810

Drop in labor force lowers unemployment rate

In today’s Jobs Picture, economist Heidi Shierholz explains that the decline in the unemployment rate from 9.2% to 9.1% was entirely due to a drop in the labor force, not an increase in the share of workers with jobs.  The labor force participation rate declined to 63.9% in July, its new low of the downturn. The labor force is thus smaller than it was before the recession started, by more than 700,000 workers, though the working-age population grew by over 7 million in that time.  There are currently 2.8 million “marginally attached” workers – workers who want a job, are available to work, but have given up actively seeking work.  If these workers were in the labor force and counted as unemployed, the unemployment rate would be 10.7% right now instead of 9.1%.

See the latest labor market numbers, updated every month as new data becomes available, on The State of Working America’s Economy Track.