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The government reported that unemployment rate in November remained steady at 4.7%. One of the problems about the unemployment rate is that it only measures people looking for a job. If you’re not out there looking, you don’t count. Obviously, the worse the job market is, the more people stop looking for work.

At the beginning of the decade, around 67% of the population was considered part of the jobs market. Today, that number is closer to 66%. One percent is a big deal in a country this size.

If the labor market participation rate simply matched the peaked number from February 2000, then it would mean that nearly three million more people would be in the job market.

Here’s a more accurate picture of employment. This chart shows the number of people working as a percentage of the entire population.

It’s not horrible, but it’s hardly something to brag about either. Clearly, we’re far from our full potential. What I find interesting is the deterioration in the number this year. The good news is that today’s number is a small break in that trend. In November, we saw the largest increase in the percent of the population employed in over five years.

Posted by edelfenbein at December 7, 2007 10:34 AM