By Ylan Q. Mui
February 11 at 12:20 pm
The unemployment rate used to be a pretty straightforward economic indicator. It showed the percentage of people who want a job but don’t have one — one of the most basic measures of labor market health.
But the number has been acting in funny ways since the recession, and it just keeps getting weirder. The unemployment rate skyrocketed as millions of people lost their jobs during the darkest days of the financial crisis. That part makes sense.
What is harder to understand is why the jobless rate has dropped substantially even though many workers do not have jobs. Solving that puzzle requires looking at more esoteric labor market data. Even newly minted Fed chief Janet Yellen said on Capitol Hill today that “we shouldn’t focus only on the unemployment rate.”