took a crack at the jobless rate issue in a note to clients on Tuesday, admitting that the situation “doesn’t feel” like unemployment is really at 5 percent. Because of the way unemployment is calculated, the rate can be reduced either by more people finding jobs or more people giving up on their job search. Factoring in a partial recovery in the labor force participation rate from levels not seen since the 1970s, the economists estimate the “real” unemployment rate is about 6 percent and potentially as high as 7.7 percent.
That’s still a far cry from Trump’s claim that the real unemployment rate is “into the twenties” — but the broader point remains that Americans are more sensitive to the labor force participation rate, which has been collapsing since the dot-com bubble peaked in the late 1990s.
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