Unemployment Drops Slightly Because People Stopped Looking for Work

The August jobs report from the Bureau of Labor Statistics shows that the unemployment rate went down a little in the last month — it sits at 7.3 percent. The report reads that 169,000 jobs were added in August, but when you account for revisions from the June and July, only 104,000 net jobs were added. That's not very good.

As The Washington Post's Neil Irwin points out, the fact that the unemployment rate went down is due to people dropping out of the labor force. So the percentage does not indicate that more people are working, necessarily. Economist Justin Wolfers says the best number to look at is the three-month average of jobs added:

Best measure of the underlying pace of jobs growth is the 3-month average, which is +148k. That's BARELY enough to keep unemployment falling

— Justin Wolfers (@justinwolfers) September 6, 2013

And Irwin notes that the average is falling — the six-month average is 160,000, and the last 12-month average is 184,000. According to the report, there are currently 11.3 million people unemployed in the U.S.

The sectors that added the most jobs were retail and healthcare. Retail added 44,000 in jobs in August, most of them in clothing stores. Healthcare jobs came primarily from ambulatory care services. You can read the full report here. 

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