Unemployment Drops Following Decline in Labor Force

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Written by Dean Baker   
Friday, 02 December 2011 13:00

According to the latest Bureau of Labor Statistics' employment report, 315,000 people left the labor market in October. This move pushed the unemployment rate down by 0.4 percentage points to 8.6 percent. BLS' establishment survey also showed a weaker-than-expected 120,000 job gain for October, but this bad news was largely offset by upward revisions of 72,000 to the job growth numbers for the prior two months.

The drop in labor force participation was entirely among women, especially black women. Participation numbers among white women fell by 0.2 percentage points to 199,000. The drop among black women was 164,000, a drop of 1.2 percentage points. These monthly numbers are highly erratic, and it is likely that at least part of this drop will be reversed in future months. Nonetheless there had been a trend of declining participation rates among both white and black women even prior to the November plunge. This suggests that there is a real issue of women losing access to jobs; although the December figures may show some reversal.

For more in-depth analysis, read the latest Jobs Byte.

Tags: economy | jobs | unemployment