932,000 Americans drop out of labor

Nearly one million Americans dropped out of the labor force last month, the third-highest monthly increase in individuals leaving the workforce in US history.

The US economy added 204,000 jobs in October but the unemployment rate rose to 7.3 percent from 7.2 percent as the labor participation rate plummeted to a new low of 62.8 percent, leaving an astonishing 932,000 Americans out of the labor force, according to data released by the Labor Department on Friday.

While the numbers could have been skewed by the 16-day shutdown of the federal government, the US labor force as a whole keeps shrinking rapidly.

Back in September, before the shutdown began, the labor force participation rate stood at just 63.2 percent, the lowest level since 1978.

About 450,000 federal workers were furloughed during the government shutdown, but they were counted as employed in October jobs report because they received back pay.

The U-6 unemployment rate, considered a broader gauge of actual joblessness in the US, increased to 13.8 percent, from 13.6 percent in September. The number of Americans out of work for at least six months stood at 4.1 million last month, representing 36 percent of all those unemployed.

Meanwhile, a new report warns that more than two million Americans will lose their federal unemployment benefits, if Congress fails to extend the jobless-aid program.

Another 1 million Americans, who exhaust their state benefits, will not be eligible for the federal program in the first quarter of 2013, according to the National Employment Law Project, an advocacy group.

The report estimates that 1.3 million jobless workers will lose their benefits immediately at the start of 2014. Another 850,000 workers will exhaust their regular unemployment insurance in March.

HJ/HJ