New labor stats: Unemployment rolls lowest since 1973

As we always emphasize, this is only a part of the employment picture, but it’s an important part because it measures not just people who are unemployed, but people who are actually receiving government unemployment benefits as a result of being unemployed. That is not only an indicator of productivity but also of what it’s costing taxpayers to see these people not working. Unemployment benefits are generally administered by the states, although there is some federal money involved in funding it. You’ll recall that during times of high unemployment, Congress has been known to pass never-ending “extensions” of the standard 26-week limit on benefits, and that gets expensive to the taxpayers. At a time like this, an awful lot of other things are costing the taxpayers dearly, but this isn’t – at least in relative terms:

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A few things to note: The 4.1 percent figure is the U-3 unemployment rate, which doesn’t count people who have dropped out of the workforce. Those people don’t apply for unemployment benefits, but neither do they apply for jobs. The U-6 unemployment rate, which does count those people, is at 8 percent. That’s an 11-year low, and it indicates many who had dropped out of the workforce are coming back, but there’s still a difference of nearly 4 percent between the two figures. When that gap narrows, then a low U-3 like 4.1 percent will be closer to the impressive number it appears to be on first glance. It’s not as if unemployment was 10 percent when Obama left office, although it did get that high less than a year into his presidency and it took a long time for it to come back down. It was below 5 when Trump was sworn in, and he’s continued to preside over a very tight labor market. One of the reasons for that is that Obama’s policies disincentivized so many people against working, which is why labor force participation hit its lowest rate since the Carter Administration when he was in office. What the economy really needs is for more people to rejoin the workforce. That’s starting to happen, and that’s a very good thing. In the meantime, we’ll take the lowest number of people receiving unemployment benefits since 1973, and hope that it stays that way.

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