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Unemployment Rate Drops Due to Fewer Job Seekers

September 8, 2012 (Unemployment) – Job applicant frustration over lack of employment opportunities has caused approximately 368,000 people to stop searching for work in August 2012. The number of people working age who are either working or looking for work, known as the “labor-force participation rate,” is now at its lowest level since September 1981. The labor-force participation rate has fallen rapidly since 2007 and was 63.5 percent in August 2012, down from 63.7 percent in July.

The unemployment rate, however, does not count those people who are not actively looking for work. Those who do not apply for unemployment or decide to go to school instead are not counted as unemployed. So because fewer people are looking for employment, the national unemployment rate has dropped from 8.3 percent to 8.1 percent. But because unemployment rates do not count all unemployed people, the job market is weaker than the official unemployment rate suggests.

To put the numbers in better perspective, if the number of people looking for work today were as high as it was when the recession began in December 2007, the August 2012 unemployment rate would have been 11.6 percent instead of 8.1 percent.

The unemployment rate has been above 8 percent since February 2009, a month after Obama’s inauguration—the longest period of such elevated joblessness since the Great Depression of the 1930s.

In Stanislaus County, the unemployment rate stood at 15.7 percent as of July 2012 (roughly the same rate as when President Barrack Obama took office in January 2009), having had climbed dramatically since the end of 2007 (September 2007 – 7.7 percent; December 2007 – 9.6 percent; March 2008 – 11.2 percent; October 2008 – 11.3 percent; December 2008 – 13.4 percent; January 2009 – 15.3 percent. See the following link for further information: Google Public Data.

Similar numbers can be seen in San Joaquin County/Stockton where unemployment stood at 15.1 percent as of July 2012. Unemployment was much more bleak in Merced County where unemployment stood at 17.5 percent as of July 2012. As of the date of publication, I do not have labor participation rates for local counties.

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