Payrolls Increased 372,000 in June

EconEye Admin

4 years ago

Nonfarm payrolls increased 372,000 in June. The official unemployment rate was 3.6%, unchanged from May. An alternative measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons fell sharply, dropping to 6.7% from 7.1%.—cnbc.com

Answer the following questions to check your understanding of the story.

Why doesn’t the official unemployment rate include discouraged workers?

The official unemployment rate doesn’t include discouraged workers because _______________.

a) they are not actively looking for a job

b) they are laid off and waiting to be called back to a job

c) they are unlikely to find a job

d) they may have a job but are discouraged about their future prospects

Wrong! - To be counted as unemployed, a person must be available for work and must be in one of three categories. What are those categories? Is a discouraged worker in any of these categories?

Good Job! - To be counted as unemployed a person must be available for work but without work and have actively searched during the past four weeks; have been laid off from a job and waiting to be called back to the job; or waiting to start a new job in the next 30 days. A worker who has stopped looking for a job because of repeated failure to find one is a discouraged worker and is not counted as unemployed.

Would the official unemployment rate in June 2022 change if all 372,000 new jobs were filled by discouraged workers, everything else remaining the same?

If all 372,000 new jobs were filled by discouraged workers, _______________.

a) the unemployment rate would fall

b) the unemployment rate would rise

c) the unemployment rate wouldn’t change

d) the unemployment rate would rise, fall, or not change but we don’t know for sure

Wrong! - Discouraged workers are not included in the labor force, so if all the new jobs are filled by discouraged workers, the labor force increases. The unemployment rate is the percentage of the labor force that are unemployed so with no change in the number unemployed, what happens to the unemployment rate?

Correct! - Discouraged workers are not included in the labor force, so if all the new jobs are filled by discouraged workers, the labor force increases. The unemployment rate is the percentage of the labor force that are unemployed, so with no change in the number unemployed, the unemployment rate would fall.

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