When Growth Looks Bad


The lede of this New York Times story on the most recent round of numbers from the Bureau of Labor Statistics should be at least initially double-take inducing:

The economy created 337,000 new jobs in October, nearly double the 169,000 that Wall Street was expecting, but the overall unemployment rate rose marginally to 5.5 percent.

Stay your collective "jigga-wha?" faithful Reasonoids; it's just an artifact of the way unemployent stats are calculated in the U.S. See, reasonably enough, they don't want to count as "unemployed" people who aren't actually looking for work—someone who's voluntarily quit their job to write a book, or a student who's taking some time off after graduation to backpack around before joining the workforce aren't emblems of an infirm economy, after all. (Well, not necessarily: It's hard to gauge what people might do given a different set of opportunities. During the dot-com boom, say, the opportunity cost of a leisurely break after college probably seemed a lot higher. On the other hand, a strong economy might give people a financial cushion such that they feel they can afford to take that time off.) But that means the official figures also don't count people who're so dispirited with the state of the job market that they've at least temporarily stopped looking. So, the Times notes "unemployment rate edged up from 5.4 percent in September as more people joined the search for jobs." In other words, as the economy appears to pick up, more people decide it's worth pounding the streets for work, and the official unemployment rate rises. In honor of Stan Lee, a no-prize to the first commenter who finds someone citing the unemployment stat in isolation as bad news.