The Wall Street Journal this morning posted a headline regarding the dismal job creation in May. However, the headlines across all news outlets regarding the May jobs report are misleading.
It is stated that 38,000 jobs were created, yet involuntary part time jobs increased by 468,000, over 500,000 discouraged workers left the work force, and the March and April jobs total was revised downward by 59,000. This should not read as a job gain, but rather a net loss of over 1 million full time jobs.
The number of workers out of the labor force hit a record 94.7 million in April, and the labor participation rate declined to 62.6%. At the rate the economy has been moving since the recession, the US could see 100 million workers out of the labor force. Further, what would happen to the economy if less than 60% of the labor force participates? While this is a stretch from current levels, it is not an impossible premise to consider.
The population must look past the political spin of the media to understand the true underlying figures in published economic reports. The unemployment rate of 4.7% is not a good barometer of economic health, as the actual May employment report numbers tell a vastly different story.
Employment Report Source: BLS