With great fanfare, the Labor Department released the last jobs report before the election: 248,000 new jobs in September (with some upward revisions in previous months), and an unemployment rate that has dropped below the magical 6.0% barrier to 5.9%. Under normal conditions, this would be a cause for celebration. New jobs and lower unemployment are signs of an improving economy. However, buried in the report is the fact that 315,000 people dropped out of the labor force at the same time, which is what caused the decline in the unemployment rate.

During the post-war period, the unemployment rate was broadly correlated with the health of the economy. As the economy improved, hiring picked up, and the unemployment rate declined. Or conversely, the economy worsened, people were laid off, and the unemployment rate increased. The government has never counted people who were not looking for a job as part of the labor force, and this hasn’t been a problem. In the post-war period, we had an expansion of the labor force as women started entering it in large numbers. However, we haven’t had an issue with people of working age quitting the workforce because they couldn’t find a job. Until now.

Today, the unemployment rate is less of an accurate measure of the health of the American economy, The decline unemployment rate over the last five years has been driven in large part by people leaving the workforce. This is not to imply that there has been no real job growth. There most certainly has been. However, this recovery hasn’t been robust, and people have become discouraged looking for work. In addition, many people have had to take part-time work and are struggling, and many who have full time work don’t feel secure. It is quite a testament to the weakness of the recovery that roughly half of America still thinks that we are in a recession. It is not necessarily that, as some have implied, that the unemployment statistic is being fraudulently manipulated to make the economy seem better than it is. It is simply that the unemployment statistic as it has always been calculated simply doesn’t reflect the reality that is a large fraction of the American populace any more. After all, we could get to full employment (that economists have defined to be around 4%-5% unemployment) simply by convincing enough people to stop looking for work.

Under normal conditions (i.e. conditions that existed up through 2007-2008), an unemployment rate of 5.9% would imply that there was a robust recovery under way. However, this is clearly not the case. Those who are predicting that this rate, broadly speaking, is good for the President simply don’t understand the new reality through which this rate should be interpreted. The American population doesn’t trust the Republicans more on the economy because they have touted a plausible economic vision. They haven’t. But after 6 years of Obama, it is clear that he has no real idea how to get the economy working for most Americans again. Until the unemployment rate starts dropping while the labor force is expanding at the same time, people won’t feel that economy is on the mend and won’t give the party in power (whichever one it is) the credit.