[Thinking Ability] The lie of "U.S. unemployment rate improved to 4.1%"
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Now, the theme this time isThe correct way to read the U.S. unemployment rate.
Below is the raw number of U.S. employment for October 2017.
2017 2017
（thousand people） September October Change
Labor force 161,146 160,381 -765
Employed 154,345 153,861 -484
Unemployed 6,801 6,520 -281
Unemployment rate 4.2% 4.1% -0.1
Looking at the unemployment rate, it has fallen from 4.2% in September to 4.1% in October, hasn’t it.
Is the U.S. job market improving?
The author does not think so.
Let’s examine how the unemployment rate is calculated.
As shown above, when looking at the numbers from September to October,
★ The labor force fell by 765 thousand
★ Employed workers decreased by 484 thousand
★ The number of unemployed also decreased by 281 thousand
In reality, the labor force represents the number of people looking for work.
In other words, the denominator, the number of job seekers, decreased significantly.
This can be interpreted as: because the job market is not very good, people found that looking for a job was pointless, and more people stopped looking for work.
In fact, since the employed population also decreased by 484 thousand, this is negative for the economy.
It is understandable that 10-year Treasury yields have fallen to 2.333%.
Do not take the superficial unemployment rate at face value.
Note) The above is my personal opinion and is intended solely to improve financial literacy. Therefore, it was not created for investment solicitation purposes. Please make final investment decisions at your own responsibility.
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