Job seekers apply for the 300 available positions at a new Target retail store in San Francisco, California August 9, 2012.
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REUTERS/Robert Galbraith

Jason Furman (PIIE) and Wilson Powell III (Harvard Kennedy School)

The official unemployment rate continued to fall in July from 11.1 in June to 10.2, a slowdown from the improvement in May and June. As in prior months of the pandemic, the official unemployment rate continues to understate the unemployment rate from a historically-comparable perspective. A “realistic unemployment rate” was 12.0 percent in July, falling slightly faster than the official unemployment rate. The small reduction in this gap reflects continued improvement in reducing the misclassification error that was partially offset by a slight fall in labor force participation, a potentially worrying sign this early in the recovery.

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The Peterson Institute for International Economics building is closed to staff and visitors until further notice. All PIIE personnel are working remotely, with access to telephone messages.

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REUTERS/Robert Galbraith