U.S. Unemployment Rate Drops To 6.7% In December

The Labor Department has released its unemployment statistics for the month of December, and on the surface it looks to be very good news. The official unemployment rate dropped by 0.3% for the second month in a row. The rate fell from 7.0% in November to 6.7% in December -- marking the first time the rate has been below 7% since unemployment ballooned in the recession at the end of the Bush administration. The December rate of 6.7% also marks a year-long drop of 1.1% (since the rate was 7.8% in December of 2012).

That seems to paint a pretty rosy picture of unemployment in the United States, but the reality is not very rosy at all. For instance, this substantial drop in the unemployment rate is not due to a healthy and substantial job creation. Only about 74,000 new jobs were created in December ( less than the number needed to take care of new entrants to the workforce). The rate dropped because the size of the official civilian workforce dropped (from 155,284,000 in November to 154,937,000 in December -- a drop of 347,000 workers).

And that drop in the civilian workforce is reflected in the rise in those workers who are "marginally-attached" to the workforce (workers who are unemployed but no longer counted in the official statistics because they have not looked for work in the last 4 weeks). The number of the marginally-attached workers rose from 2,096,000 in November to 2, 427,000 in December. In other words, the unemployment rate dropped because more of the unemployed have given up and stopped looking for work -- not because of new jobs being created.

And that's not all of the bad news. It seems that about 55,000 of those 74,000 new jobs were in the low-wage retail sector (about 74.3% of the new jobs). This just raises the number and percentage of low-wage workers in this country -- emphasizing the need to raise the minimum wage.

Here is the official unemployment rate broken down demographically:
Adult men...............6.3%
Adult women...............6.0%
Teenagers...............20.2%
Whites...............5.9%
Blacks...............11.9%
Asians...............4.1%
Hispanics...............8.3%
Less than HS diploma...............9.8%
HS graduates...............7.1%
Some college/Associates degree...............6.1%
Bachelors degree or more...............3.3%

Here are the relevant numbers for December of 2013:

Size of the civilian workforce:

154,937,000

Official number of unemployed workers:

10,351,000

Official unemployment rate:

6.7%

Number of marginally-attached workers (no longer counted in official statistics):

2,427,000

Real number of the unemployed (Official unemployment + marginally-attached):

12,778,000

Real unemployment rate:

8.25%

Number of under-employed workers (working part-time because full-time work was unavailable):

7,771,000

Number of unemployed and under-employed workers:

20,549,000

Unemployed / under-employed rate:

13.26%