
Originally Posted by
Momus
Yeah, not so much. First, you're confusing the household survey, which the BLS uses for the unemployment rate, with the payroll survey, which is used to determine monthly job losses/gains. The 250,000 jobs created are independent of the current estimate of the labor force.
Set that aside, though, and let's talk about that 1.2 million. Those weren't people who "stopped looking for work." Every year, the BLS updates its estimates of the labor force. This year, they made those adjustments based on data in the 2010 Census. The BLS raised its estimate of the 16+ population by about 1.5 million. Now the BLS has to estimate the percentage of this increased population that is in the labor force and working. If they'd simply asserted that all of them were working, U3 would have been 8.2% instead of 8.3%. The BLS didn't do that, though. Demographically, most of this increased population was 55+ and 16-24, cohorts that have a lower rate of labor force participation, for obvious reasons. So the BLS estimates that of that 1.5 million people, 258,000 were in the labor force, of which 216,000 were working. That's where the 1.2 million come from, and they aren't people who stopped looking for work. It's just a population adjustment, and it happened in 2009, too. No surprise -- it happens every year.