94,184,000 Americans Not Participating in Labor Force

Unemployment rate increases to 5 percent in September from 4.9 percent in August

Job fair / AP
October 7, 2016

There were 94,184,000 Americans not participating in the labor force in September, a decline of 201,000 people from the previous month, according to data released by the Bureau of Labor Statistics on Friday.

The bureau counts those not in the labor force as people who do not have a job and did not actively seek one in the past four weeks.

The labor force participation rate, which is the percentage of the population that has a job or actively looked for one in the past month, increased from 62.8 percent in August to 62.9 percent in September.

The unemployment rate for all Americans increased to 5.0 percent after remaining steady at 4.9 percent in August. This measure does not account for those individuals who have dropped out of the labor force and simply measures the percent of those who did not have a job but actively sought one over the month.

The "real" unemployment rate, otherwise known as the U-6 measure, was 9.7 percent, which remained steady from the previous month. Democrats such as Sen. Bernie Sanders (I., Vt.) and Federal Reserve chair Janet Yellen have said this measure accounts for discouraged workers and those working part time instead of full time for economic reasons and is more representative of the labor market.

There were 5,894,000 Americans working part-time in September who would rather have a full-time job but cited economic reasons for not having such employment. This number declined by 159,000 over the month.

According to the bureau, involuntary part-time workers are "persons who indicated that they would like to work full time but were working part time (1 to 34 hours) because of an economic reason, such as their hours were cut back or they were unable to find full-time jobs."

"The high level of uncertainty among small business owners makes them reluctant to create new jobs and hire new employees," said Juanita Duggan, president of the National Federation of Independent Businesses. "Small business is traditionally the engine of job growth."

"Unfortunately for the economy, that engine isn’t revving," she said. "This is a very weak recovery, and what little strength there is has been uneven."