Jobs Report Shows Increase of 517,000 in January

EconEye Admin

4 years ago

In January 2023, the unemployment rate fell to 3.4%, and the labor force participation rate edged up to 62.4%. The broader underemployment rate that includes discouraged workers and those holding part-time jobs for economic reasons edged up to 6.6%. The working-age population increased by 1,118,000—cnbc.com

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

Why aren’t discouraged workers and those holding part-time jobs for economic reasons included in the official unemployment rate?

Discouraged workers ____________ and those holding part-time jobs for economic reasons ____________ so neither group is counted as unemployed.

a) are currently laid off and waiting to be called back; are not actively searching for work

b) are waiting to start a new job within 30 days; are employed

c) have stopped looking for work; are counted as employed

d) have stopped looking for work; are anticipating a full-time job when the economy improves

Wrong! - What does it mean to be unemployed? Are workers with part-time jobs unemployed? Are discouraged workers who aren’t seeking a job unemployed?

Correct! - Discouraged workers have stopped looking for a job because of repeated failure to find one. And those holding part-time jobs for economic reasons are counted as employed. To be included in the official unemployment rate, a person must be without work and be making specific efforts to find a job within the previous four weeks.

Why would the labor force participation rate have increased in January 2023?

The labor force participation rate would have increased only if ____________.

a) all 517,000 new jobs were filled by discouraged workers

b) the labor force increased by a greater percentage than the working-age population increased

c) all 517,000 new jobs were filled by the unemployed

d) the 1,118,000 people who joined the working-age population also joined the labor force

Wrong! - The labor force participation rate is calculated as the number in the labor force divided by the working-age population, all multiplied by 100. We know that the working-age population increased by 1,118,000 people. What happened to the labor force to make the labor force participation rate increase?

Good Job! - The labor force participation rate is calculated as the number in the labor force divided by the working-age population, all multiplied by 100. If the percentage increase in the labor force exceeds the percentage increase in the working-age population, then the labor force participation rate increases.

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