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Discrepancies in Employment Numbers for August

WASHINGTON, D.C. – The Labor Department’s August employment report showed that the U.S. unemployment rate is 8.1%, down from 8.3% in July. But while many celebrate these numbers, others warn a more troublesome statistic is being overlooked – record numbers of people who have simply quit looking for a job.

The latest employment report shows that the number of Americans “not in the civilian labor force” in August hit a record high of 88,921,000. The Labor Department regards a person as not in the civilian labor force if they are at least 16 years old, are not in the military or an institution such as a prison, mental hospital or nursing home, and have not actively looked for a job in the last four weeks.

119,000 fewer Americans were employed in August than there in July. According to the Bureau of Labor Statistics, there were 142,220,000 Americans working in July but in August there were only 142,101,000 Americans working. There were 155,013,000 in the U.S. civilian labor force in July. That number dropped to 154,645,000 in August.

Combined, these numbers indicate that 368,000 people simply dropped out of the labor force last month and did not even look for a job. The reason for an improved unemployment number is because so many people dropped out of the labor force and stopped looking for work. The unemployment rate is the percentage of people in the labor force who did not have a job.

The Bureau of Labor Statistic also reported that in August the labor force participation rate (the percentage of the people in the civilian non-institutionalized population who either had a job or were actively looking for one) dropped to a 30-year low of 63.5 percent, down from 63.7 percent in July. The last time the labor force participation rate was as low as 63.5 percent was in September 1981.

The one bright spot in real employment rains was in the public sector. Among government workers, unemployment fell from 5.7% to 5.1%. This is contrary to President’s Obama’s assertion to the opposite. Answering questions from reporters on June 8, President Obama said that the private sector was “doing fine” and that the “weaknesses” in the economy were in government.

“The private sector is doing fine,” said Obama. “Where we’re seeing weaknesses in our economy have to do with state and local government, oftentimes cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.”

A year ago, in August 2011, there were 1,271,000 unemployed government wage and salary workers. So, the number of unemployed government workers has dropped by 212,000 since then.

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