FOX News Channel host Bill O'Reilly praised President George W. Bush's handling of the economy by pointing to the relatively modest unemployment rate, and he dismissed as "a bunch of hooey" claims by Democrats that recent declines in the unemployment rate are due primarily to workers leaving the labor force rather than unemployed workers finding new jobs. In fact, the Democrats' claim derives from the U.S. Labor Department's own Bureau of Labor Statistics (BLS) -- the same agency that calculates the unemployment rate.
From the September 27 broadcast of The Radio Factor with Bill O'Reilly:
O'REILLY: But 5.5 [percent] unemployment in the face of a war on terror, when you take a cataclysmic hit in 2001, he's [Bush] done a pretty darn good job on that economy if you ask me.
E.D. HILL (FOX News Channel host and Radio Factor co-host): But the Democrat argument is that people have stopped looking for the jobs, and that's why you've got those numbers down.
O'REILLY: Oh, that's just -- that's just a bunch of hooey. Because it's the same unemployment as Clinton had, so people weren't looking then, either. You can say that all day long.
BLS's most recent monthly Employment Situation Summary, released September 3, makes clear that the slight decline of the unemployment rate in August from 5.5 percent to 5.4 percent, is not due to more people actually working but rather to the decline in labor force participation -- the percentage of the overall population that is either working or looking for work. When labor force participation declines, the unemployment rate can also decline even if job growth is stagnant, since the Labor Department does not count as unemployed those people who stop "participating" in the labor force by actively looking for work. BLS reported: "Total employment held at 139.7 million in August, and the employment-population ratio -- the proportion of the population age 16 and over with jobs -- was essentially unchanged at 62.4 percent. The civilian labor force was about unchanged over the month at 147.7 million. After rising in July, the labor force participation rate edged down to its June level of 66.0 percent." So the unemployment rate declined even as the number of people employed "held" and the portion of both the labor force and the overall population declined or remained "essentially unchanged."
By contrast, when Bush took office in January 2001, the participation rate was 67.2 percent. BLS also reported that "persons who currently want a job" also increased from 4.63 million to 4.84 million in August, even as the unemployment rate declined.
Media Matters for America has previously noted conservatives citing the unemployment rate to defend Bush's economic record but conveniently ignoring declining labor force participation.