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Interpreting data: Unemployment rates demonstrate the challenge
Today’s unemployment rate announcement offers another demonstration that every statistic demands a second (and third and fourth) look. News coverage of the Bureau of Labor Statistics announcement of December employment stats understandably focused on the overall unemployment rate , down from 9.8% to 9.4% — a good news story. But when you look just below the surface you find good news — and bad. While unemployment declined by .4 percent, the labor participation rate declined by .2 percent — half of the overall decline in unemployment. In other words, half of the decline is attributable to more people finding work — and half is attributable to fewer people looking for it.