The last time the unemployment rate was 4.6% was August, 2007. Bush was President and Democrats had been in control of Congress for only 8 months. By October, 2009 unemployment had hit 10%.
However, that number has been steadily dropping since then, falling below 5% for the first time of Obama’s Presidency in January, 2016. Today, after adding only 178,000 jobs, the rate fell to 4.6% again. In fact, monthly job growth has been anemic for 8 years while the unemployment rate has steadily fallen.
The reason economists have been cautious is that the drop in the unemployment rate has less to do with job growth and more to do with how many have given up looking for a job. The U-6 unemployment rate is only a measure of the percentage of workers in the market who are employed. It doesn’t count anyone who is not working and not actively seeking work.
Since January, 2009 the number of employed workers in the United States has increased 11 million. That is an increase of 8% over 8 years. On the other hand, about 15 million have dropped out of the workforce since January, 2009. That’s nearly a 19% increase in the permanently unemployed over 8 years. 4 million more have dropped out of the workforce over the last 8 years than have been hired.
But we are still growing, so that’s good, right? New hires rose 178,000 in November. On average, they’ve grown about 135,000 a month under Obama. The economy needs a minimum of 145,000 new jobs a month just to keep up with population growth. On the other hand, an average of about 155,000 have dropped out of the labor force each month. No credible economist is cheering 4.6% unemployment this time because it only represents long term economic failure.