Finally some good news out of the Labor Department; the unemployment rate has dropped to 8.6 percent. There are 13.3 million people unemployed; down by 594,000 from the previous month.
However, 315,000 people gave up looking for a job and left the work force, and that reduced the Labor Participation Rate to just 64 percent. Less people working doesn’t bode well for economic growth in the months ahead.
Only 120,000 net jobs were added in November, but the population grew by 172,000. So, job creation didn’t come close to even breaking even. A staggering 8.7 million jobs were lost in the first 25 months of this recession, and thus far only 2.5 million have come back.
No doubt Barack Obama will crow about the decline in the unemployment rate and offer it as evidence that his economic policies are working. But, a closer analysis of all the data paints a far less rosy picture and explains why most economists are predicting high unemployment and negligible economic growth to continue through at least 2012.