The age of gated recessions
ITHACA — Something strange is happening in the US labor market. The latest data released by the Bureau of Labor Statistics show that the U.S. economy lost 23,000 jobs in July, yet the unemployment rate actually fell to 4.1 percent. A closer look helps explain the apparent contradiction. To be counted as unemployed in the United States, a person must be actively looking for a job. Today, however,…
In the United States, a peculiar phenomenon is occurring in the labor market. Despite the Bureau of Labor Statistics reporting a loss of 23,000 jobs in July, the unemployment rate unexpectedly declined to 4.1 percent. This discrepancy can be attributed to a phenomenon known as the "discouraged worker" effect. In essence, when the job market becomes so dire that individuals cease actively seeking employment, they are no longer counted as unemployed.
Consequently, even as demand for labor dwindles, the unemployment rate can decrease because the labor force is shrinking at a more rapid pace. Estimates indicate that over two million people have exited the U.S. labor force since November 2025. Compared to other advanced economies, the U.S. faces a high poverty rate, with 10.6 percent of Americans living below the poverty line in 2024, defined as an annual income of less than $31,812 for a family of four.
Critics argue that this statistic may not fully capture the magnitude of the issue, as poverty is a complex and multifaceted problem.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- The age of gated recessions koreatimes.co.kr
