Pick your favorite headline

Browsing web-sites this morning, and I noticed something strange:  Unemployment held steady and rose at the same time last month.  Don;t believe me?  Click the picture at the right and take a look at the two highlighted headlines.  Which one is right?  Here is the AP story both headlines presumably draw from:

Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, underscoring the economy's fragile state. The unemployment rate held steady at 5.5 percent.

Comments

[joshua corning]

I have noticed this for awhile...job cuts with a steady unemployment rate. You guys aren't labor economists but i bet your office is close to one....what is going on here?

[odograph]

I recommend The Big Picture for ... appropriate cynicism. There are several employment stories there today.

[John Whitehead]

Here is one potential answer:

The unemployment rate is the number of unemployed divided by those in the labor force. If the labor force participation rate rises (good news) while the number of unemployed goes up the unemployment rate could hold steady.

For example, say the number of unemployed is 5 and the labor force is 100. If the unemployed rises to 6 and the labor force rises to 120 then the unemployment rate would not change.

[odograph]

Unfortunately, the labor participation rate can also be a measure of desperation, "the two income trap", seniors re-entering the workforce, etc.

[David Zetland]

Isn't this just a rounding error? 5.48 goes to 5.54? Still 5.5 -- but not "steady"

[newtyre]

Sell Italian bonds. Italian public debt has reached a record high at 1646,7 billion euros.It is worse than 1992 when the country went very near to declare default(insolvency)

[joshua corning]

For example, say the number of unemployed is 5 and the labor force is 100. If the unemployed rises to 6 and the labor force rises to 120 then the unemployment rate would not change.

and

Isn't this just a rounding error? 5.48 goes to 5.54? Still 5.5 -- but not "steady"

Instead of asking you guys i should just go to the source.

here: http://www.bls.gov/news.release/empsit.nr0.htm

Civilian labor force ....|154,534|154,390| -144
Employment ............|146,046|145,891| -155
Unemployment ..........|8,487|8,499| 12

It looks like the Civilian Labor force shank. My guess as to why would be that the Boomers are retiring and/or dieing.

[Dano]

Remember, politicians have been selectively counting this indicator for years. If you've given up looking for a job, even though you're not working, you are no longer counted. Voila! the number goes down.

Best,

D

[joshua corning]

Remember, politicians have been selectively counting this indicator for years. If you've given up looking for a job, even though you're not working, you are no longer counted. Voila! the number goes down.

Only problem being that we know the population and we know the labor force and we know that the difference between the two have not followed any economic down turns, but has followed changes in demographics...ie women entering the work force, and, more recently, an aging work force.

Please feel free to post more Daily Kos myths that I can demolish.