Almost 5 million unemployed over 6 months
While the unemployment numbers are certainly good, there are some strange numbers if you dig a bit deeper into the report. U6 was virtually unchanged and labor participation has dropped a touch.
The most frightening thing in the report is that long term unemployment of over six months jumped from 1.661 million one year ago to 4.934 million now. It was also up from 4.218 million last month. So almost 5 million people are reports to be unemployed and yet still looking for employment. This begs the question of how many people who have been unemployed over 6 months are discouraged and not seeking a job and so are not included in the report.
Even more frightening is the employment to population ratio which has dropped from 62.8 to 59.8 in the past year. This trend is virtually assured to continue even if the economy improves as baby boomers retire. Fifty percent is likely a magical number that will be reached in five years or so. The number ten years ago was 64.9, so in fifteen years we are likely to have fallen from almost 2/3rds of the population employed to half. This will have a significant effect on the country, since much of this shift is from employment to social security.Combine this with a blossoming national debt and there might be a future issue. In fact it might even come up in the Presidents second term. It will be interesting to see how he deals with the fallout from the bailout.