Home > Uncategorized > Why The Unemployment Rate Has Fallen In 2012 – Business Insider

Why The Unemployment Rate Has Fallen In 2012 – Business Insider

The best news for President Obama is that the unemployment rate has steadily fallen in an election year, and had a big drop today.

At a campaign event today, Mitt Romney sought to play down the significance of these numbers.

Buzzfeed has Romney’s quote:

“The unemployment rate as you noted this year has come down very, very slowly, but it’s come down none the less. The reason it’s come down this year is primarily due to the fact that more and more people have just stopped looking for work. And if you just dropped out of the work force, if you just give up and say look I can’t go back to work I’m just going to stay home, if you just drop out all together why you’re not longer part of the employment statistics so it looks like unemployment is getting better, but the truth is, if the same share of people were participating in the workforce today as on the day the president got elected, our unemployment rate would be around 11 percent.”

So is Romney correct?

Is the reason that unemployment has come down due to more and more people leaving the work force?

To answer this question, we first require a clear definition of how the unemployment is calculated.

Essentially, the unemployment rate is derived using the Civilian Employment Level (how many people have jobs) and the size of the Civilian Labor Force (how many people could have jobs).

Specifically to recreate the number we take the following equation: [1-(Civilian Employment/Civilian Labor Force]*100.

via Why The Unemployment Rate Has Fallen In 2012 – Business Insider.

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