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Economy 101: Dropouts hold down unemployment rate

CHRISTOPHER S. RUGABER | 1/13/2010, 5:30 a.m.

WASHINGTON — Nearly 2 million Americans have dropped out of the work force since last May — and if they hadn’t, the unemployment rate would have risen a lot more dramatically over the last several months.

Either way, joblessness is quite high. The Labor Department said Friday the unemployment rate remained at 10 percent last month, the same as in November and just below the 10.1 percent rate reached in October. The October figure, which was revised down from 10.2 percent, was the highest in 26 years.

Employers cut 85,000 jobs last month, but hiring and firing isn’t the only thing that affects the unemployment rate. Also important is the overall size of the labor force, which is the number of people working and actively looking for work.

The unemployed who aren’t searching for jobs —  either because they’re discouraged or because they’re returning to school or caring for a family member, among other reasons — aren’t included in the labor force and aren’t counted in the unemployment rate.

Since May, the labor force has dropped to 153.1 million from nearly 155 million, a 1.2 percent decline. More than 660,000 people exited in December, the most in any single month in 14 years.

Had all those people remained in the work force and hunted for jobs, the December unemployment rate would have been 11 percent instead.

What worries economists is that many of those people are likely to resume job hunting if the economy continues to pick up. That could boost the jobless rate to 10.5 percent or higher, even if the economy improves and employers start hiring again.

Here, by the numbers, are some more details you can find deep in the employment report.

From red to black and back again
85,000: The net total of jobs lost in December
4,000: The net total of jobs gained in November, the first gain in 23 months
127,000: The net total of jobs lost in October
691,000: Average number of jobs lost each month in the first quarter of 2009
69,000: Average number lost each month in the fourth quarter
7.2 million: Total decline in U.S. payrolls since recession began in December 2007

Misery loves company
15.3 million: People unemployed in December 2009, down from a record 15.6 million in June
12.1 million: People unemployed in December 1982, the record before the latest recession
10 percent: Unemployment rate in December 2009
10.1 percent: Unemployment rate in October, revised down from 10.2
4.9 percent: Unemployment rate in December 2007, when the recession began
10.8 percent: Unemployment rate in December 1982, the highest since World War II

Tough times for the youngest
27.1 percent: Unemployment rate for teenagers in December
15.6 percent: Unemployment rate for those 20 to 24 years old Long-term joblessness
39.8 percent: Proportion of unemployed who’ve been out of work six months or longer, a record
29.1 weeks: Average length of unemployment in December, also a record
6.1 million: Number of people unemployed for six months or longer, also a record
1.3 million: Number unemployed for that long in December 2007, when the recession began

Where the jobs are
46,500: The number of temporary jobs added in December
9,900: Jobs added in financial services and insurance
10,800: Jobs added in education
21,500: Jobs added in hospitals, nursing and other health care sectors
4,000: Jobs added in architectural and engineering services
3,400: Jobs added in computer services

Underemployed
9.2 million: Number of part-time workers who would have preferred full-time work last month
2.5 million: People without jobs who want to work but have stopped looking
17.3 percent: “Underemployment’’ rate in December if you include the above two categories
17.4 percent: Underemployment rate in October, the highest in records dating to 1994

December unemployment rate by group
13 percent: Female heads of households
8.4 percent: Asians
9 percent: Whites
12.9 percent: Hispanics
16.2 percent: Blacks
27.1 percent: Teenagers

(Christopher S. Rugaber is an AP Economics Writer)