On MPR this morning they had one of those worthy "Fact Check" segments, purporting to keep the candidates honest, but really showing that even the best of American media has no teeth.
They called John Kerry on his claim that unemployment was 5.5%. "In fact" the reporter intoned in a way that suggested she'd caught him understating his income by half on his tax return, "the unemployment rate is 5.4%".
I'm all for accuracy but the unemployment rate was 5.5% in July. It's changed far less dramatically than the casualty level in Iraq. But I digress.
The unemployment rate is pretty low -- it's a rate many countries would be happy to have. But here's the rub -- the labor force participation rate is down from 67.2% in January 2001 to 65.9% today.
In other words the economy is doing so well that there are millions of people who are not even bothering to look for work, who are retiring early, or are staying in school to avoid the job market.
Bottom line: The shortfall in employment is closer to 7% of the labor force than the 5.5% unemployment rate indicates, or about 25% larger than the media has you believe.
(Calculations below the fold).
UPDATE: 26 October. Brad DeLong has similar thoughts
| Labor force size in September 2004 | 147483 |
| Population 16 years and over, September 2004 | 223798 |
| Estimated labor force size at January 2001 labor force participation rate of 67.2% | 150169 |
| Number of unemployed in September 2004 | 7964 |
| Difference between potential and actual labor force size | 2686 |
| Employment shortfall | 10650 |
| All figures in thousands, from BLS website | |