Has Unemployment Fallen For The Wrong Reason?
In this E21 posting, Scott Winship writes about the current jobs numbers. Everyone agrees the August 2013 jobs numbers were lousy. Despite the fact that the unemployment rate fell for the second month in a row, continuing a march downward that started in late 2009, journalists and analysts left, right, and center believe that the decline has been illusory. The Wall Street Journal’s Real Time Economics blog declared, “Unemployment Rate Drops for Wrong Reasons.” The Washington Post’s Wonkblog upped the ante, saying unemployment dropped “for the worst reason.” According to liberal economist and blogger Jared Bernstein, “of the two ways you can reduce unemployment, we got the bad one.” Conservative American Enterprise Institute blogger, James Pethokoukis concurred, as did Brookings economist and blogger Justin Wolfers, as did libertarian Reason writer Peter Suderman.
But in fact, while changes in the official unemployment rate have sometimes given too rosy a picture of the state of the recovery, joblessness really has declined and continues to do so (just not as quickly as we’d like).