Question

If many workers become discouraged from looking for jobs, explain how the number of jobs could decline but the unemployment rate could fall at the same time.

Short answer

The number of jobs could decline but the unemployment rate could fall at the same time due to discouraged workers.

Step-by-step solution

Step 1. Unemployment Rate.

The unemployment rate is the percentage of adults who are in the labor force and thus seeking jobs, but who do not have jobs.

Step 2. The decline in the unemployment rate.

The number of jobs could decline but the unemployment rate could fall at the same time due to discouraged workers. The discouraged workers mean that there is less number of jobs available. More people dropping out of the labor force than being unemployed leads to a fall in the unemployment rate.