Why did the jobless rate go down so much?

In a nutshell, November's drop to 8.6 percent from 9 percent the previous month was due to more people finding work - as well as more people dropping out of the workforce. Huh? Remember that there are two main ways that employment gets measured: Through a survey of payrolls (the number of jobs added or lost) and a separate survey of households (the unemployment rate). There's always a debate among economists about which survey is more reliable (generally it's the payroll number that gets more attention). The household survey on which the jobless rate is based, determines the number of people people who are without jobs, who are available to work, and who have actively sought work in the prior four weeks. This time out, more people said they had jobs, but just as importantly, about 315,000 workers dropped out of the labor force - and the jobless rate counts only people who are actively looking for work. That makes the 0.4 percent drop a little less impressive than it might seem at first blush. As for payrolls, a net 120,000 jobs were added last month, and the September and October numbers were revised higher. So this is essentially a strong report, though keep in mind that there still are more than 13 million unemployed workers - many of whom have been out for a couple of years. Here are stories from the WSJ and the NYT, and the BLS release.