Jobs report: 117,000 new jobs, but more people left labor force

The Bureau of Labor Statistics released its jobs report for July Friday morning, finding that 117,000 new jobs were created and the unemployment rate dropped very slightly from 9.2 percent to 9.1 percent. However, more people left the labor force than jobs were created.

The private sector added 154,000 new jobs. Government jobs declined by 37,000, showing that state and local governments are still shedding jobs because of lower revenues and as funds from the Recovery Act dry up. However, 23,000 of those job losses were due to the Minnesota government shutdown last month. It takes about 125,000 jobs per month just to keep up with population growth, according to the BLS — meaning that even job gains like this are simply not enough to make a dent in the unemployment rate.

However, the employment-population ratio — the number of working-age people who are employed — fell to 58.1 percent, its lowest number since 1983. Such a low number means that many people are still discouraged and have dropped out out of the labor force. The U-6 measure — a broader measure of unemployment including involuntary part-time workers and discouraged workers — remains at just over 16 percent.

The U.S. has regained about 1.8 million of the 8.7 million jobs lost during the recession, according to Bloomberg; adding 117,000 in a month is nowhere near enough to return to a natural unemployment rate of five percent.