Payrolls Soared by 336,000 in September

EconEye Admin

3 years ago

With the addition of 336,000 jobs, the unemployment rate remained unchanged in September at 3.8%. The labor force participation rate, those working against the total size of the workforce, held steady at 62.8%. The employment-to-population ratio also held steady at 60.4%.—cnbc.com

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

What is the error in the news clip?

a) The labor force participation rate isn’t the ratio of the number employed to the number in the labor force.

b) The unemployment rate can’t remain constant when the economy adds 336,000 jobs.

c) The unemployment rate plus the employment-to-population ratio must add to 100%.

d) The employment-to-population ratio is always greater than the labor force participation rate.

Wrong! - How are the unemployment rate, the labor force participation rate, and the employment-to-population ratio calculated?

Correct! - The labor force participation rate is the percentage of the working-age-population who are members of the labor force.

In September, the working-age population increased. What does that tell us about the number employed, the number unemployed, and the number in the labor force?

a) The number employed, the number unemployed, and the number in the labor force all increased.

b) The number in the labor force didn’t change, so the increase in the number employed was the same size as the decrease in the number unemployed.

c) The labor force increased so the sum of employed and unemployed increased, but we don’t know how the number employed and the number unemployed changed.

d) The number employed and the number in the labor force increased, and the number unemployed decreased.

Wrong! - The working-age population increased but the labor force participation rate and the employment-to-population ratio remained steady. What happened to the number in the labor force and the number employed? How can we use information about the labor force to determine the change in the number unemployed?

That's Right! - The working-age population increased but the labor force participation rate and the employment-to-population ratio remained steady. So the number in the labor force and the number employed increased. The unemployment rate remained steady, so with the increase in the labor force, the number unemployed also increased.

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