unemployment is lower, the stock market is way better, the auto industry is better, you guys just overtook saudi arabia as numero uno for oil production. Your nation is in a better place.
The country is better off in some respects, worse off in others. In still other respects it isn't clear whether it is worse off or better off.
As far as the labor market goes, don't you know that the official unemployment rate goes down when unemployed persons stop looking for work?
That's why people keep referring to the
labor force participation rate -- the ratio of employed and unemployed-but-looking-for-work persons to the adult population. The decline in LPR is often cited as evidence of an unhealthy labor market where unemployed persons are simply giving up.
We can corroborate this claim by comparing LPR to the
employment-population ratio, the ratio of employed persons to adult population.
At the beginning of the year, the E-P ratio was about where it was in September 2009, whereas LPR was a few percentage points lower than in September 2009. Since LPR is just the E-P ratio + unemployed-but-looking-for-work persons added to the numerator, the variable responsible for their divergence has to be the unemployed-but-looking-for-work value.
If the decline in this value were due to people becoming employed, the E-P ratio would have gone up -- it didn't. Therefore, the only explanation for the divergence is that unemployed people exited the market entirely over the period -- short-term unemployment is perhaps becoming structural.
Further, we can control for the effects of demography -- old workers retiring can skew LPR and E-P -- by looking at the employment rate for 25-55 year olds (workers in their prime earning years). This rate dropped from ~80% to ~75% from September 2007 to September 2009 and still hasn't recovered. Either these workers all colluded to end their careers and have a welfare-fueled party or otherwise this statistic is indicative of something wrong with the labor market.
Still, there's other data to tempter this negativity, and still more to suggest a quicker-than-expected crescendo to the recovery is on the way -- even if LPR, E-P, and the like don't return to their previous highs achieved during unsustainable, debt-fueled asset bubbles. But you can't be surprised when people assess the labor market negatively -- whatever the official unemployment rate -- when data like the above exists. And that's to say nothing of stagnant wages.