The Bureau of Labor Statistics reported on Friday that the U.S. added 163,000 nonfarm jobs in July, more than twice the amount it added in June, but unemployment went up to 8.3%. According to the BLS, “Employment rose in professional and business services, food services and drinking places, and manufacturing.”
So how does the unemployment rate rise while the economy adds more jobs than it has since February? The New York Times’Catherine Rampell explains that the rate at which the economy has been adding jobs, an average of 151,000 a month this year, is nowhere near enough to keep up with the expanding workforce.
The government uses two surveys to measure employment. A survey of businesses showed job gains. To figure out the unemployment rate, the government conducts a survey of households and then divides the number of unemployed people by the size of the labor force. In July, more people said they were unemployed, while the size of the labor force contracted even more.
The unemployment rate has been above 8% since President Obama’s first month in office, the longest stretch on record. Real unemployment which takes into account the number of those who are underemployed has remained above 14% over the same time period.
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