This is a controversial talking point in the employment report every month – why did the unrate fall? Was it due to people falling out of the labor force or was it from actual job creation? MarketWatch has a nice break-down showing that this month’s decline in the unrate was actually due to job growth and not just the fall in people looking for work:
This is always a key question — why did the unemployment rate fall? Was it from people giving up on looking for a job, or from new jobs? In July, the answer was much more from job creation (the red bar) then from the modest drop in the labor force (the blue bar).
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.