When New Hampshire’s Economic and Labor Market Information Bureau released the April unemployment figures on May 17, the state’s politicians were quick to issue statements claiming credit for an unemployment rate that fell below 5% for the first time since 2008. They should have looked more closely at the numbers before they hit the “send” button.
“This is tremendous news for our workers, our businesses, and our state,” said Gov. John Lynch, claiming the low rate to be due to our “business friendly” climate.
Republican leaders were equally quick to claim credit. House Majority Leader D.J. Bettencourt said passage of pro-business legislation had given employers “confidence to hire new workers and expand our economy.”
That might sound convincing until you look at the numbers.
The official unemployment rate doesn’t really measure how many people aren’t working. To count, you have to be in the “labor force,” which means looking for a full-time job. If you’re not working and you’re not looking, you are not in the labor force and you don’t count toward the unemployment rate.
From March to April, the number of new jobs grew by only 690, no sign of significant economic recovery. The main reason the unemployment rate dropped from 5.2% in March to 4.9% in April is that the state’s labor force fell by 3160 workers. Why they left the labor force – retirement, death, frustration with the lack of openings for decent jobs – is not apparent from the statistics.
A slightly longer timeframe gives a more complex view: since January, the labor force has shrunk by 5060 workers and the number of those working has grown by 5080. Taken together, that adds up to a bit more than 10,000 fewer workers counted as unemployed, leading to a drop in the official unemployment rate from 6.1 to 4.9%.
Neither set of figures should give politicians anything much to crow about.