As a matter of political rhetoric and public awareness, the overall U.S. unemployment rate seems to carry quite a bit of weight. People want to know whether it’s going up or down; how long it’s been above one plateau or another; etc. Note last year, for example, how significant it was during the presidential campaign when the jobless rate finally dipped below 8% – news so significant that it forced a variety of Republicans to push wild-eyed conspiracy theories.
With this in mind, it’s tempting to look at this morning’s news as encouraging. The unemployment rate ticked down again from 7.4% to 7.3%, which is the lowest it’s been since December 2008, the month before President Obama was first inaugurated.
And at first blush, that seems encouraging, but in today’s case, it’s really not. While few would root for a higher jobless rate, let’s remember once again that this figure can be misleading – sometimes it goes up for good reasons (more people entering the workforce, confident about new job opportunities) and goes down for bad reasons (people withdrawing from the workforce).
In August, the news was discouraging – many Americans dropped out of the labor force, which is the opposite of what we’d like to see.
As we talked about a month ago, in the political world, we too often see a lazy game – pick the metric that tells you what you want to hear. When the total number of jobs created soars and the unemployment rate doesn’t dip, Republicans ignore the former and shout about the latter. When job creation slows but the jobless rate falls, Democrats do the opposite.
So let’s try to be consistent: the number to keep an eye on is the monthly job totals. I’m generally glad when the unemployment rate drops, but it’s not the metric to watch.