Unemployment the Same; “Unemployment” Down
Here’s an interesting observation. The Providence Journal‘s story about Rhode Island’s decreasing unemployment rate may have been headlined “State’s jobless rate declines to 12 percent,” but the lead reads, “The figure is counteracted, however, by decline in size of labor force,” and Andy Smith sets the tone of the article at the very beginning:
On the surface, there is good news in the state unemployment numbers released Friday. The Rhode Island jobless rate dropped to 12 percent in June, a decline from 12.3 percent in May, and the number of people classified as unemployed decreased by 1,900, falling to 69,300.
By contrast, the cycling news on WPRO — to which I’m able to listen at work, now that Buddy’s show has moved to drive time — clearly presented the numbers as positive.
The upshot is that 800 government jobs (mostly for the Census) went away; 800 private sector jobs appeared (presumably with a significant percentage of temporary seasonal jobs); and 2,800 Rhode Islanders gave up their job searches and exited the calculation. Anybody who is tracking unemployment as a measure of actual economic health and resident well-being, in other words, should not be encouraged.
I will say this, though: It looks like my prediction of 15% unemployment was off the mark, but mostly because I didn’t include the possibility of workers exiting the market.