At the height of lockdowns the unemployment rate reached 14.7% in April, its highest level since 1940. But as states eased those restrictions, the rate quickly fell. It dropped again in September, falling from 8.4% to 7.9%.
While that sustained drop signals an economy moving from recession to growth, it’s also severely undercounting joblessness.
It boils down to how the Bureau of Labor Statistics (BLS) calculates the official unemployment rate: Only out-of-work Americans who are searching for new positions are categorized as unemployed. If the jobless aren’t searching, they get thrown out of the civilian labor force altogether. (The unemployment rate is calculated by dividing the number of unemployed Americans by the civilian labor force count).