OpenSky analysis of unemployment data shows Nebraska’s low unemployment rate may be more reflective of Nebraskans ending their job searches as opposed to a recovering state economy.

While the October unemployment rate of 3% has returned to its pre-pandemic level, the number of employed people in Nebraska has declined by roughly 21,000 since March.

Another way to examine employment is to look at the Nebraska labor force, which is composed of the number of Nebraskans who are employed or seeking work, rather than the state’s entire working-age population. Nebraska’s labor force declined by nearly 33,000 people, or 3.1%, from March to October. Nebraska’s labor force participation rate — the percentage of the population that is either employed or seeking work — was 68.9% in October, the lowest rate since December of 1989.

Because the unemployment rate is the percentage of unemployed individuals in the labor force, when workers stop looking for jobs, they are no longer counted as part of the labor force or considered unemployed for the purposes of this calculation. This causes the unemployment rate to decrease.

A comparison of August to September helps illustrate the point further. The number of employed Nebraskans only increased by 46 in this span, yet the state unemployment rate declined from 4% to 3.6%. This occurred in large part because roughly 4,000 people exited the labor force, and were no longer factored into the unemployment rate. An additional 5,000 people exited the labor force from September to October, dropping the unemployment rate further.

While it is good news that Nebraska’s unemployment rate among the best in the nation, the fact remains that many in the state are still struggling economically amid the global pandemic.