The US unemployment rate fell to a five-year low of 6.7 percent in December 2013. Payroll jobs increased by a lower-than-expected 74,000

1. Economics for your Classroom from
Ed Dolan’s Econ Blog
US Unemployment Falls to 5Year Low of 6.7% in December
but Job Growth Slows
January 11, 2014
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2. Unemployment Falls to 5-Year Low of 6.7 Percent
 The US unemployment rate fell to 6.7% in
December 2013, the lowest since October
2008.
 The unemployment rate is the ratio of
unemployed persons to the labor force.
The labor force decreased by 347,000 for
the month. The number of employed
workers rose by 143,000 and the number
of unemployed decreased by 490,000
 The unemployment rate is based on a
survey of households that includes selfemployed and farm workers
 Data for earlier months were revised, in
most cases by 0.1 percentage points or
less
January 11, 2014 Ed Dolan’s Econ Blog

3. Broad vs. Standard Unemployment Rate
 The BLS also provides a broader
measure of job-market stress, U-6
 The numerator of U-6 includes
 Unemployed persons
 Marginally attached persons who
would like to work but are not
looking because they think there
are no jobs, or for personal reasons
 Part-time workers who would prefer
full-time work but can’t find it
 The denominator includes the labor
force plus the marginally attached
 U-6 was unchanged in December
January 11, 2014 Ed Dolan’s Econ Blog

4. 74,000 Payroll Jobs
 Payroll jobs grew by just 74,000 in
December, well below expectations
and the slowest rate for more than
two years
 The payroll jobs data are come from
a separate survey of employers; the
number of jobs it reports can differ
from the household survey
 November job growth was revised up
to from 203,000 to 241,000
 Goods producing industries lost jobs,
mostly in construction, but
manufacturing gained slightly
 The federal, state and local
governments also lost jobs during
the month
January 11, 2014 Ed Dolan’s Econ Blog

5. Involuntary Part-time Work Little Changed
 One component of the broad
unemployment rate consists of
people working part-time “for
economic reasons,” popularly
known as “involuntary part-time”
employment.
 This category includes workers who
would like full-time work but can’t
find it, or whose employers have cut
their hours below full time
 Involuntary part-time work, which
has been elevated throughout the
recession and recovery, was little
changed in December
January 11, 2014 Ed Dolan’s Econ Blog

6. Long-term Unemployment Falls to Low for Recovery
 The recession and slow recovery have
been characterized by unusually high
levels of long-term unemployment
 The percentage of the unemployed
out of work for 27 weeks or more rose
in December for the second month in
a row, erasing some of the gains
made earlier in the year
January 11, 2014 Ed Dolan’s Econ Blog

7. Employment-Population Ratio Near All-Time Low
 The civilian employment-population
ratio was unchanged in December at
58.6, the same as in December a
year ago
 The continuing low employmentpopulation ratio, which fell sharply
during the recession, reflects both a
weak economy and an aging
population
January 11, 2014 Ed Dolan’s Econ Blog

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