The Big Drop: Employment Rate Cause for Concern

Friday's labor report is the latest confirmation that our economy is sputtering. A loss of 54,000 jobs and a 9.6 percent unemployment rate are bad enough. But a deeper look, at the little-known civilian employment-population ratio, presents what may be a more revealing and troublesome picture.


In contrast to the better-known unemployment rate, which measures the percentage of adult Americans who are actively seeking jobs but do not have one, the civilian employment-population ratio could be called the employment rate, measuring the percentage of adult Americans who have a job.

The August report, released Friday, pegged the employment rate at 58.5 percent, the same as June and only a tad higher than July's rate of 58.4. These numbers are approaching the dismal employment rates of the early 1980s, when the rate bottomed out at 57.1. Since the start of this summer, nearly 400,000 Americans have entered the labor force, but only 130,000 have found jobs according to the BLS release.

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Henry Olsen is a vice president and the director of the National Research Initiative at AEI.