First, there’s just the psychological effect of 10% unemployment. The media had been positioning that as the dreaded magic number and now it appears that we’ll never reach it.

Now that we have reached it, perhaps you could tell us more about this psychological effect?

Hmm, Lost more jobs yet the unemployment rate went down? Amazing. The numerator grew by 247K, so how is this possible? I sense a disturbance in the math … I better go check that story.

Moreover, in July the workforce fell by 422,000, far more than the 155,000 decline in June, suggesting jobless workers may have given up looking for new work. Since the start of the recession in December 2007, the economy has shed 6.7 million jobs, the department said, adding that the number of long-term unemployed continues to rise.

Ah, yes. That would be the missing information. But I’ll go check the actual government report from the Bureau of Labor Statistics just to be sure.

… the unemployment rate was little changed at 9.4 percent … about 2.3 million persons were marginally attached to the labor force in July, 709,000 more than a year earlier … these individuals, who were not in the labor force, wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

To translate: The only reason the UE rate figure did not rise was that the BLS removed a number of the long-term unemployed from their calculations. Those people are still unemployed, they’re just not being counted for calculating the rate, and there are 700K more of them now than this time last year. Were they included in the UE rate calculation, the UE rate would register about 10.4%.