The unemployment rate fell to 7.7 percent from 7.9 in October, and 146,000 jobs were added to the economy. But the first number is from the Household Survey data and the second from the Establishment Survey data. As usual in this economy, the two surveys tell different stories.
According to the Household Survey, the number of unemployed remained about the same, at 12 million, and long-term unemployed made up 40.1 percent of total unemployed, both dismal numbers. Equally dismal was the number of underemployed, working part-time jobs but wanting full-time work, at 8.2 million.
Again the participation rate (the percentage of working-age adults in the labor force) declined, to 63.6 percent, accounting for most of the decline in the unemployment number. The baby boomers retiring at the rate of 10,000 a day is the only thing that is keeping the numbers from being even more dismal than they are.
Interesting that the "long term unemployed"- meaning those who have concluded that their financial situation is better by not seeking employment – are not counted in the official unemployment numbers, and this class is increasing. This is a tremendous drain on the economy. Finding a way to employ such people, about 8 million, would reduce the deficit by over $200 billion, over twice as much as would be collected by increasing taxes on their would be employers. Then, expanding the economy by reducing the short term unemployed to 4% from 8% would further reduce the deficit by a similar amount. Together this represents at least a 40% reduction in the deficit without raising taxes a single penny. Unfortunately, this was basically Romney's plan, but he failed to articulate it or he was drowned out by hostile media and negative campaigning to which he did not respond in a way that the general population could understand.
Interesting how the numbers for the past two months were revised downward after the election. Quite convenient.