The BLS report (http://www.bls.gov/news.release/empsit.nr0.htm) came out today with a surprising .1% drop in the unemployment rate to 9.4% (U-6 is at 16.3%), which many here and elsewhere are proclaiming is a turnaround in the employment situation. While this may be the case, other data in that same report leave me doubting that we are going to see any meaningful improvement in the employment situation for some time.
The first piece of bad news from today's report is that the labor force participation rate declined by .2% to 65.5%. This number is showing us that people are dropping out of the job market entirely (these people are not picked up by U-6), thus the improvement we saw in U-6 of .2% is likely made up for by people that have given up to the extent that they no longer want employment at all. This is bad for economic confidence and will again be a drag on the employment situation, as many of these new dropouts of the labor force will attempt to re-enter it once times look better.
The second piece of bad news from the BLS report today was that the employment-population ratio fell by another .1% in July. This number measures the number of employed people vs. the number of all working age people and thus measures employment without any categorical statistical bias (ie U-3, U-6). According to wiki (http://en.wikipedia.org/wiki/Employment-to-population_ratio) 70%+ is good, 50% is bad and with the US at 71.5% in 2005, we have fallen 12% since then. Not very good.
Finally, the number of long-term unemployed (27+ weeks) rose 584,000 in July to over 5 million. That is a 13% jump in one month and is very concerning for future economic health, as these people are going to start rolling off the unemployment benefit rolls soon and will have to further cut spending if they cannot find employment soon.
So overall, the report today was better than expected, but still not very good when one examines all the data provided.