10 Reasons Why the Latest Unemployment Numbers Are No Reason to Cheer

By Michael Snyder

The U.S. government is telling us that the unemployment rate fell all the way down to 9.0% in January. Should we all cheer? Is it now going to be a lot easier to find a job? Has the economy finally turned around? Are happy days here again? 

Well, it is a good thing to have a positive attitude, but the truth is that there is just not much to cheer about when you take a closer look at the recent unemployment numbers.

First of all, the U.S. economy only added 36,000 jobs in January. Economists had been expecting an increase of about 145,000 jobs, and an increase of 150,000 jobs per month is necessary just to keep up with population growth. So why did the unemployment rate go down? Well, the government says that over half a million Americans suddenly dropped out of the labor force in January.

So what happened to those 500,000 Americans? Did they all win the lottery? Have they all become independently wealthy? Did they all die? No, the vast majority of them are still around and the vast majority of them still desperately need jobs. It is just that the government does not count them as "looking for work" anymore.

The following are 10 statistics that reveal that the latest unemployment numbers from the government are no reason to cheer...

1) According to CNBC, economists were expecting the U.S. economy to add 145,000 jobs during January. Obviously the 36,000 figure was a huge disappointment.

2) Approximately 150,000 jobs need to be added to the economy each month just to keep up with population growth.

3) The government jobs report also indicated that 504,000 Americans "dropped out of the labor force" in January. That may make the unemployment numbers look better, but the truth is that the vast majority of those 500,000 Americans still need incomes and still need jobs. [For an explanation on the different ways economists measure unemployment, check out Understanding Economic Indicators: The Employment Picture.]

4) According to the latest numbers from Gallup, the unemployment rate actually increased to 9.8% at the end of January.

5) Gallup's measure of "underemployment" (those that are unemployed plus those that are working part-time but want full-time employment) was sitting at 18.9% at the end of January.

6) As I reported, there are approximately 28 million Americans that would like full-time jobs but that don't have full-time jobs.

7) According to Zero Hedge, the number of Americans that are "not in the labor force" but that would like a job right now has hit an all-time record high. If you add all of those people into the official unemployment figure it would jump to 12.8%.

8) According to Calculated Risk, this is the deepest and most brutal employment downturn that the United States has experienced since World War II. The current employment downturn started 37 months ago and there doesn't seem to be any indication that we will return to pre-recession levels any time soon.

9) The U.S. Labor Department has also announced that job growth during 2010 was much weaker than they had previously reported. The numbers for eight months were revised down, and the numbers for four months were revised up. After all of the revisions are accounted for, it turns out that a total of 215,000 fewer jobs were created during 2010 than originally calculated.

10) According to one brand new survey, four out of every 10 Americans are struggling "a lot" to pay the bills right now.

[For more information about unemployment and its impacts, read Structural Unemployment Is Here to Stay and The Economics of Unemployment.]

Note from the Editor: This article was originally posted at The Economic Collapse blog.