Friday, October 02, 2009

Real Unemployment Jumps to 17.0 Percent in September (Details, Breakdown))

Few people are familiar with the U-6 report that is issued by the United States Department of Labor-- Bureau of Labor Statistics. The U-6 (Table A-12: Alternative measures of labor under utilization) measures the real rate of unemployment in the United States.

Most news organizations report the more popular U.S. Department of Labor: Civilian Unemployment Rate. If you read the report today you learned that unemployment is 9.8 percent for September.
If you read Table 12 in the Bureau of Labor Statistics report you learned the real unemployment rate is 17.0 percent, not 9.8 percent.
You would also have noticed the real rate of unemployment is 17.0 percent versus 10.6 percent in September 2008.

To view this report and the numbers go here.

Real Unemployment U-6 -- 17.0%

There are other groups of unemployed that are not counted in the more popular employment report. The Bureau of Labor Statistics U-6 report includes the unemployed, and those that have thrown in the towel.

The U-6 report includes:

  • Total unemployed
  • plus all marginally attached workers
  • plus total employed part time for economic reasons
In other words,
  • marginally attached workers are persons who currently are neither working nor looking for work, but indicate that they want and are available for a job, and have looked for work sometime in the recent past.
  • Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job.
The U-6 report counts everyone that is unemployed--officially and unofficially.
Here are some other statistics that you might find disconcerting.

  • About 2.2 million persons (not seasonally adjusted) were marginally attached to the labor force in September. 615,000 more than a year earlier. These individuals wanted and were available for work, and had looked for a job sometime in the past 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
  • Among the marginally attached, there were 706,000 discouraged workers in September, up by 239,000 from a year earlier.
  • In September, the average workweek for production and nonsupervisory workers on private nonfarm payrolls fell by 0.1 hour to 33.0 hours--the lowest level on record for the series, which began in 1964.
  • The number of long-term unemployed (those jobless for 27 weeks or more) increased by 450,000 to 5.4 million.
  • In September, 35.6 Percent of unemployed persons were jobless for 27 weeks or more.

This morning the stock market reacted negatively to the unemployment report. If you are wondering why--all you need to do is look beyond the obvious.

This is what this website is all about.

These numbers do not bode well for stocks and indicate at best, we are looking at slow growth in the months ahead.

All of the statistics in this article were sourced from the Department of Labor--Bureau of Labor Statistics.
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Original content by Bob DeMarco, All American Investor