Unemployment Drops to 9.1%, But...

…the drop is mainly due to Americans leaving the work force. Giving up, in other words.

Employers added more jobs than forecast in July, the jobless rate fell and wages climbed, easing concern the U.S. economy is grinding to a halt. Stock futures rallied and Treasuries fell.

Payrolls rose by 117,000 workers after a 46,000 increase in June that was more than originally estimated, Labor Department data showed today in Washington. The median estimate in a Bloomberg News survey called for a July gain of 85,000. The jobless rate dropped to 9.1 percent as more Americans left the labor force, while average hourly earnings climbed 0.4 percent.

Job gains may need to accelerate further to bolster consumer spending, which rose last quarter at the slowest pace in two years. Weaker growth puts more pressure on Federal Reserve policy makers meeting next week to try to steer the world’s largest economy away from another recession at a time when inflation is also accelerating.

The jobless numbers aren’t as awful as expected, and that’s about the best that can be said for them. At the moment, the number to keep an eye on is overall growth, which was only 1.3% in July. Historically, when the economy dips below 2% growth, a recession usually follows.

Meanwhile, there’s nothing to crow about even in the ever so slightly improved unemployment numbers.

The jobless rate declined as 193,000 people left the labor force and the number of unemployed dropped by 156,000. The share of the eligible population holding a job declined to 58.1 percent, the lowest since July 1983.

In response to all the economic news, even the New York Times goes with the “d” word: Double-dip.