You Call This "Good News"? Percentage of Americans Working Sank To 25-year Low

Forget the "good news" about the jobless rate dipping from 9.5 to 9.4%, reported Friday. That figure leaves out discouraged Americans who've given up the search and are therefore not counted as "unemployed." That statistical quirk often makes this widely-watched stat misleading during recessions (when it can understate weakness), recoveries (when it can understate strength) and turning points (when it can send false signs of a rebound).

There's an easy way to get through the noise: Take a look at the Labor Department's employment-to-population ratio, which is included in the same monthly report. It's the share of the population (16 and older) still employed. It gets to the heart of the matter, and it does not paint a pretty picture.

The ratio fell from 59.5% to a new 25-year low 59.4% in July, extending an unprecedented free fall that began more than two years ago. This chart shows the sharpest, longest plunge in this statistic ever in records going back to 1948.

In other words, it's been at least a half-century since the job market got this bad, this quickly for this large a share of working-age Americans. And the bloodletting didn't end in July. It didn't even slow much. The situation is more than just "troublesome," as some have described it.

It borders on horrific.

The unemployment rate generally grabs headlines because it helps filter out social, demographic and cultural changes that can cloud the picture of the job market's health: like more women entering the work force through the '70s, or teenagers abandoning it through the '90's.

But demographic changes like those evolve slowly over a generation or more -- not months or years. Besides, the picture doesn't look much better when you slice and dice for different demographics and especially for men (where things look even more abysmal). 

See the additional charts below. In short, it's pretty ugly out there (terrifying for men), and as of the July reporting period, the situation was still getting worse -- still in free fall.

Working-age women have fared much better than other groups, but haven't seen this fast a drop in their employment-to-population ratio since 1955.

Working-age men haven't seen this fast a drop in their ratio since the government records going back to 1948.

Working-age teenagers (16-19) have seen the steepest 1-year drop in their ratio since 1954.