Though we gained jobs in January after a December loss, this is not a we’ve-turned-the-corner report.
Frick want on to say: “We especially shouldn’t take solace that the unemployment rate fell dramatically given that’s mainly because more Americans dropped out of the labor force.”
- The unemployment rate fell because fewer people are actively looking for a job – a smaller labor force is not an indication of a healthy job market. Ideally a “healthy” labor market has high labor market participation AND a lower unemployment rate because people have jobs.
- The economy added jobs – a reversal from the previous month recording job losses.
- Why It Matters: The economy remains “down” 10 million jobs since March/April last year when America effectively “shut down” to stop the spread of the coronavirus. Questions remain about how best to recover these jobs (economic stimulus? a changing economy?) and how that impacts the health of the U.S. economy overall.
by Jenna Lee,