Unemployment fell because people are giving up.

unempoyment-chart

The Washington Post delivers the bad news :

Unemployment dipped in July for the first time in 15 months, but the jobs data released Friday also brought into focus the limits of the budding economic recovery.

The new numbers raised hopes that the recession could be nearing an end. The unemployment rate fell to 9.4 percent, from 9.5 percent in June, and employers slashed 247,000 jobs, the slowest rate of decline in nearly a year.

For all the optimism in Washington and on Wall Street — President Obama said the economy is “pointed in the right direction,” and the stock market rose 1.3 percent — some details in the report show that the labor market remains weak. The stabilization in the economy is not rippling through to ordinary American workers. Economists generally expect the unemployment rate to resume its rise in the coming months, ultimately reaching or surpassing 10 percent.

The July decline in the jobless rate came about not because more people had jobs, but because 422,000 people removed themselves from the labor force, essentially giving up the search for work. The number of long-term unemployed people — those who have been out of a job but looking for more than 26 weeks — rose by another 584,000.

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