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In 2000, 64.4 percent of working-age Americans had formal jobs, either full-time or part-time, according to Table B-35 on page 361. That was the measure’s high water mark.

The ratio drifted down to 63.0 percent in 2007 before hitting the skids in the 2008 recession that was largely caused by federal real-estate policies.

By October 2009, five months after the recession technically ended, the ratio hit bottom at 58.5 percent, where it remained two years later in December 2011.

Given the nation’s working-age population of 240.5 million, that 4.5 percent drop means that roughly 11 million Americans have fallen out of the workforce. They are excluded, however, from the nation’s formal unemployment rolls — which document only 13.75 million unemployed Americans.

By excluding those non-working Americans, the White House can claim that the formal unemployment rate has fallen to 8.3 percent in January 2012, down from a peak of 10 percent in 2009.

But that 8.3 percent rate only include unemployed Americans who have looked for a job in the four weeks before a sample is taken. It does not include the more than 11 million Americans who have given up looking for jobs or who have quit the workforce entirely.

During the first 27 months of the Reagan recovery, total employment increased by 7.51%, or 7.4 million jobs. In contrast, total employment in September 2011 was still 13,000 lower than June 2009. The Obama recovery has been the ultimate “jobless recovery”.

However, even stranger than the performance of RGDP has been the path of nominal GDP (NGDP). Over the past 12 quarters, NGDP has grown at an annualized rate of only 2.38%. The last time it grew this slowly was 1932 – 1934. The shortfall in NGDP suggests that a major source of our economic woes is the Federal Reserve, just as was the case during the Great Depression.

A most interesting article below on unemployment.  Rather than using the measurement of folks not finding jobs who are trying, focus on job creation over time and how it is changing.   It is not now a pretty picture. 

Jobless Numbers Are Worse Than You Think

The situation is much more dire now than it was during the 1980s.  (Below is a short version of this article)

One simple alternative (Note: to the % not finding work who are seeking jobs) would be to measure the labor force as the number of people with jobs. Unemployment would be determined based on increases or decreases in the number of people employed relative to historic job growth.

The nearby chart compares employment and that trend. It shows the percentage difference between employment and the trend line generated from monthly employment figures over the past 50 years (July 1960 through June 2010).

One simple alternative would be to measure the labor force as the number of people with jobs.  Unemployment would be determined based on increases or decreases in the number of people employed relative to historic job growth.

Employment fell briefly to about 6% below the trend during two previous recessions: in 1975 and again in 1982-1983. During those periods, the unemployment-rate peaks were 9% (in 1974) and 10.8% (in 1982). The unemployment rate in 2009 peaked at 10.1%.

By 2010, however, employment had fallen to about 10% below the trend, far below any previous level in the last half-century. These figures indicate that as of the first half of 2010, the economy has generated about 12 million fewer jobs than expected.

In other words, things are not as bad now as they were in the early 1980s; they are much worse. Recall as well that the unemployment rate of the early 1980s was the result of the ultimately successful battle against inflation.