Real Unemployment Leaps to 17.5 Percent (Explanation)

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 10.2 percent for September.

If you read Table 12 in the Bureau of Labor Statistics report you learned the real unemployment rate is 17.5 percent, not 10.2 percent.

You would also have noticed the real rate of unemployment is 17.5 percent versus 11.1 percent in September 2008.

Real Unemployment U-6 -- 17.5%

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 2.4 million persons were marginally attached to the labor force in October,
  reflecting an increase of 736,000 from a year earlier. (The data are not sea-
  sonally adjusted.) These individuals were not in the labor force, wanted and
  were available for work, and had looked for a job sometime in the prior 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 808,000 discouraged workers in October,
  up from 484,000 a year earlier. (The data are not seasonally adjusted.) Dis-
  couraged workers are persons not currently looking for work because they believe
  no jobs are available for them. The other 1.6 million persons marginally attached
  to the labor force in October had not searched for work in the 4 weeks preceding
  the survey for reasons such as school attendance or family responsibilities.
  
• The average workweek for production and nonsupervisory workers on private nonfarm
  payrolls was unchanged at 33.0 hours in October. The manufacturing workweek rose
  by 0.1 hour to 40.0 hours, and factory overtime increased by 0.2 hour over the
  month.
• The number of long-term unemployed (those jobless for 27 weeks and over) was
  little changed over the month at 5.6 million. In October, 35.6 percent of
  unemployed persons were jobless for 27 weeks or more.
• The civilian labor force participation rate was little changed over the month
  at 65.1 percent. The employment-population ratio continued to decline in
  October, falling to 58.5 percent.

To view this report and the numbers go here.

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

Unemployment Soars to 10.2 Percent (Details)

In October, the unemployment rate rose to 10.2 percent, the highest rate since April 1983, and nonfarm payroll employment declined by 190,000.

Since the start of the recession, payroll employment has fallen by 7.3 million.

Job losses have averaged 188,000 over the past 3 months.

The employment-population ratio continued to decline in October, falling to 58.5 percent.

Since December 2007, payroll employment has fallen by 7.3 million.

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Household Survey Data

In October, the number of unemployed persons increased by 558,000 to 15.7 million. The
unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983.

Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (10.7 percent) and whites
(9.5 percent) rose in October. The jobless rates for adult women (8.1 percent), teenagers (27.6 percent), blacks (15.7 percent), and Hispanics (13.1 percent) were little changed over the month. The unemployment rate for Asians was 7.5 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks and over) was little changed over
the month at 5.6 million. In October, 35.6 percent of unemployed persons were jobless for 27 weeks or more. (See table A-9.)

The civilian labor force participation rate was little changed over the month at 65.1 percent.

The employment-population ratio continued to decline in October, falling to 58.5 percent. (See table A-1.)

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in October at 9.3 million. These individuals were working parttime because their hours had been cut back or because they were unable to find a full-time job. (See table A-5.)

About 2.4 million persons were marginally attached to the labor force in October, reflecting an
increase of 736,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-13.)

Among the marginally attached, there were 808,000 discouraged workers in October, up from 484,000 a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.6 million persons marginally attached to the labor force in October had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment declined by 190,000 in October. In the most recent 3 months, job losses have averaged 188,000 per month, compared with losses averaging 357,000 during the prior 3 months. In contrast, losses averaged 645,000 per month from November 2008 to April 2009.

Since December 2007, payroll employment has fallen by 7.3 million. (See table B-1.)

Construction employment decreased by 62,000 in October. Monthly job losses have averaged 67,000 during the most recent 6 months, compared with an average decline of 117,000 during the prior 6 months. October job losses were concentrated in nonresidential specialty trade contractors (-30,000) and in heavy construction (-14,000). Since December 2007, employment in construction has fallen by 1.6 million.

Manufacturing continued to shed jobs (-61,000) in October, with losses in both durable and nondurable goods production. Over the past 4 months, job losses in manufacturing have averaged 51,000 per month, compared with an average monthly loss of 161,000 from October 2008 through June 2009.

Manufacturing employment has fallen by 2.1 million since December 2007.

Retail trade lost 40,000 jobs in October. Employment declines were concentrated in sporting goods, hobby, book, and music stores (-16,000) and in department stores (-11,000). Employment in transportation and warehousing decreased by 18,000 in October.

Health care employment continued to increase in October (29,000). Since the start of the recession, health care has added 597,000 jobs.

Temporary help services has added 44,000 jobs since July, including 34,000 in October.

From January 2008 through July 2009, temporary help services had lost an average of 44,000 jobs per month.

The average workweek for production and nonsupervisory workers on private nonfarm payrolls was
unchanged at 33.0 hours in October. The manufacturing workweek rose by 0.1 hour to 40.0 hours, and factory overtime increased by 0.2 hour over the month. (See table B-2.)

In October, average hourly earnings of production and nonsupervisory workers on private nonfarm
payrolls rose by 5 cents, or 0.3 percent, to $18.72. Over the past 12 months, average hourly earnings have risen by 2.4 percent, while average weekly earnings have risen by only 0.9 percent due to declines in the average workweek. (See table B-3.)

The change in total nonfarm payroll employment for August was rerevised from -201,000 to -154,000, and the change for September was revised from -263,000 to -219,000.

THE EMPLOYMENT SITUATION – OCTOBER 2009, PDF, 29 pages.

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Producer Price Index (PPI, Graph)

The Producer Price Index for Finished Goods advanced 1.7 percent in August, seasonally
adjusted. This increase followed a 0.9-percent decline in July and a 1.8-percent advance in June.

Prices for finished goods less foods and energy rose 0.2 percent in August after edging down 0.1 percent a month earlier.

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The Producer Price Index for Finished Goods advanced 1.7 percent in August, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.9-percent decline in July and a 1.8-percent advance in June. In August, at the earlier stages of processing, prices received by manufacturers of intermediate goods rose 1.8 percent and the crude goods index moved up 3.8 percent. On an unadjusted basis, prices for finished goods fell 4.3 percent from August 2008 to August 2009, following a record 6.8 percent 12-month decline in July.

Finished goods

In August, over ninety percent of the finished goods increase was the result of higher energy prices, which moved up 8.0 percent. The indexes for finished goods less foods and energy and for finished consumer foods also contributed to the advance in finished goods prices, rising 0.2 percent and 0.4 percent, respectively.

Finished energy: The index for finished energy goods climbed 8.0 percent in August, the largest monthly increase since a 10.2-percent rise in November 2007. About eighty-five percent of the August advance can be attributed to higher gasoline prices, which surged 23.0 percent. Rising prices for home heating oil and liquefied petroleum gas also contributed to the increase in the finished energy goods index. (See table 2.)

Finished core: Prices for finished goods less foods and energy rose 0.2 percent in August after edging down 0.1 percent a month earlier. Accounting for over half of this increase, the light motor trucks index moved up 0.8 percent. Higher prices for passenger cars also were a major factor in the advance in the finished core index.

Finished foods: Prices for finished consumer foods moved up 0.4 percent in August following a 1.5-percent decline in July. Almost half of this increase can be attributed to higher prices for fresh fruits and melons, which rose 5.9 percent.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 1.8 percent after falling 0.2 percent in July. Accounting for about eighty percent of the August increase, prices for intermediate energy goods rose 7.1 percent. Prices for intermediate materials less foods and energy gained 0.6 percent and the index for intermediate foods and feeds moved up 0.3 percent. For the 12 months ending in August, the decline in intermediate goods prices slowed to 12.3 percent from a record decrease of 15.1 percent from July 2008 to July 2009. (See table B.)

Intermediate energy: The index for intermediate energy goods increased 7.1 percent after decreasing 1.4 percent in July. A major contributor to the August increase was diesel fuel prices, which rose 15.9 percent. Higher prices for gasoline and lubricating oil base stocks also had a significant impact on the intermediate energy goods index. (See table 2.)

Intermediate core: Prices for intermediate materials less foods and energy climbed 0.6 percent, the third consecutive monthly increase. Accounting for over half of the gain in August, the steel mill products index increased 6.8 percent. Rising prices for primary basic organic chemicals also had a considerable effect on the intermediate core index.

Intermediate foods: The index for intermediate foods and feeds advanced 0.3 percent after declining 2.0 percent in July. A 6.1-percent increase in the index for corn, cottonseed, and soybean cake and meal accounted for nearly all of the increase in intermediate foods and feeds prices.

Source Bureau of Labor Statistics of the U.S. Department of Labor

Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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THE EMPLOYMENT SITUATION -- All Sectors Report

Nonfarm payroll employment continued to decline in July (-247,000),
and the unemployment rate was little changed at 9.4 percent, the U.S.
Bureau of Labor Statistics reported today. The average monthly job
loss for May through July (-331,000) was about half the average
decline for November through April (-645,000). In July, job losses
continued in many of the major industry sectors.

The change in total nonfarm payroll employment for May was revised
from -322,000 to -303,000, and the change for June was revised from -
467,000 to -443,000.

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THE EMPLOYMENT SITUATION -- JULY 2009


Nonfarm payroll employment continued to decline in July (-247,000),
and the unemployment rate was little changed at 9.4 percent, the U.S.
Bureau of Labor Statistics reported today. The average monthly job
loss for May through July (-331,000) was about half the average
decline for November through April (-645,000). In July, job losses
continued in many of the major industry sectors.

Household Survey Data

In July, the number of unemployed persons was 14.5 million. The
unemployment rate was 9.4 percent, little changed for the second
consecutive month. (See table A-1.)

Among the major worker groups, unemployment rates for adult men (9.8
percent), adult women (7.5 percent), teenagers (23.8 percent), whites
(8.6 percent), blacks (14.5 percent), and Hispanics (12.3 percent)
were little changed in July. The unemployment rate for Asians was 8.3
percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more)
rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemploy-
ed persons were jobless for 27 weeks or more. (See table A-9.)

The civilian labor force participation rate declined by 0.2 percentage
point in July to 65.5 percent. The employment-population ratio, at 59.4
percent, was little changed over the month but has declined by 3.3 per-
centage points since the recession began in December 2007. (See
table A-1.)

The number of persons working part time for economic reasons (sometimes
referred to as involuntary part-time workers) was little changed in July
at 8.8 million. The number of such workers rose sharply in the fall and
winter but has been little changed for 4 consecutive months.
(See table A-5.)

About 2.3 million persons were marginally attached to the labor force
in July, 709,000 more than a year earlier. (The data are not seasonally
adjusted.) These individuals, who were not in the labor force, wanted
and were available for work and had looked for a job sometime in the
prior 12 months. They were not counted as unemployed because they had
not searched for work in the 4 weeks preceding the survey. (See
table A-13.)

Among the marginally attached, there were 796,000 discouraged workers
in July, up by 335,000 over the past 12 months. (The data are not
seasonally adjusted.) Discouraged workers are persons not currently
looking for work because they believe no jobs are available for them.
The other 1.5 million persons marginally attached to the labor force
in July had not searched for work in the 4 weeks preceding the survey
for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment declined by 247,000 in July. From May
to July, job losses averaged 331,000 per month, compared with losses
averaging 645,000 per month from November to April. Since December
2007, payroll employment has fallen by 6.7 million. (See table B-1.)

Employment in construction declined by 76,000 in July, about in line
with the average for the past 3 months (-73,000). Employment had de-
creased by 117,000 a month on average from November to April.

Manufacturing employment fell by 52,000 in July and has declined by
2.0 million since the recession began. In motor vehicles and parts,
fewer workers than usual were laid off in July for seasonal retool-
ing. As a result, the estimate of employment for the industry rose
by 28,000 after seasonal adjustment. In large part, July's seasonally-
adjusted increase reflects the fact that previous job cuts had been
so extensive that there were fewer workers to lay off during the sea-
sonal shutdown. Elsewhere in manufacturing, several industries con-
tinued to lose jobs in July, including machinery (-15,000) and fabri-
cated metal products (-14,000).

In July, retail trade employment declined by 44,000. Job losses in the
industry had averaged 27,000 per month over the prior 3 months. Em-
ployment in wholesale trade fell by 19,000 in July, with the majority
of the decline occurring among durable goods wholesalers.

Employment in professional and business services continued to trend
down in July (-38,000); the industry has shed 1.5 million jobs since
the start of the recession. Within professional and business services,
employment in the temporary help industry edged down in July. While
temporary help has lost 844,000 jobs since the recession began, the
declines have lessened substantially over the past 3 months.

Transportation and warehousing lost 22,000 jobs in July. Since May,
the average monthly job loss was half the average monthly decline for
November through April (-17,000 versus -34,000).

Financial activities employment continued to trend down in July
(-13,000). The average monthly decline for this industry was 23,000
over the past 3 months compared with 46,000 per month from November
through April. Since the start of the recession, the financial acti-
vities industry has lost 501,000 jobs. Employment in information de-
clined by 16,000 in July, including losses in publishing and telecom-
munications.

Health care employment increased by 20,000 in July, about in line
with the average monthly gain for the first half of this year but
down from an average monthly increase of 30,000 during 2008. Employ-
ment in lei-sure and hospitality has been little changed over the
past 3 months.

In July, the average workweek of production and nonsupervisory work-
ers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours.
The manufacturing workweek increased by 0.3 hour to 39.8 hours. Fac-
tory overtime was unchanged at 2.9 hours. (See table B-2.)

In July, average hourly earnings of production and nonsupervisory
workers on private nonfarm payrolls rose by 3 cents, or 0.2 percent,
to $18.56. Over the past 12 months, average hourly earnings have
increased by 2.5 percent, while average weekly earnings have risen
by only 1.0 percent due to declines in the average workweek. (See
table B-3.)

The change in total nonfarm payroll employment for May was revised
from -322,000 to -303,000, and the change for June was revised from -
467,000 to -443,000.

Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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