Record Numbers Of Unemployed Just Giving Up

Wednesday’s Bureau of Labor Statistics report on the labor market in every U.S. metro area [1] in June again highlights the effects of long-standing, terrible labor market conditions and the unprecedented numbers of people who are giving up active job search.

Those who stop actively seeking employment are not counted in the official “unemployment” rate. The labor force includes all those who say they are working or actively looking for work. Reflecting the record decline of 1,018,000 people that left the total U.S. labor force over the past year (June/June) and the record net two-year decline of 586,000 people, 40 of the 50 states and 216 of 373 metropolitan areas experienced labor force declines year over year to June.

These increasingly uncounted unemployed are the arithmetic reason that the official BLS national “unemployment” rate, currently 9.5%, is unchanged year over year despite the fact that BLS also reports 919,000 FEWER people employed in June 2010 than in June 2009. (All these data come from the BLS survey of households that provide the unemployment data.)

Of course, the U.S. population also increased by 2.6 million people year over year to June. Eighteen states and 92 metro areas with falling or stable unemployment rates year over year report a loss in employment. This is possible because all had a decline in the number of people counted in their labor force.

For example, the unemployment rate in Lafayette, Indiana fell from 10.6% to 10.2% over the past year and yet it suffered a devastating year over year loss of 7.4% of its employment. This decline in both the unemployment rate and the number of people employed was made possible by the dramatic loss of 7.9% of Lafayette’s labor force as the jobless stopped actively looking for work or left the area.

The unemployment rate in Greenville, S.C., fell from 11.1% in June 2009 to 9.9% in June 2010 even as Greenville lost 1.0% of its employment year over year because 2.3% of Greenville’s unemployed labor force either gave up actively looking for work or moved away.

Racine, Wisc.,  the site of a recent visit by President Obama, lost 1.2% of its employment year over year, but because its labor force declined by 2.4%, Racine’s official unemployment rate fell from 10.7% in June 2009 to 9.7% in June 2010.