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

Real Average Weekly Earnings Fall

Real average hourly earnings fell 0.1 percent from August to September, seasonally adjusted, the Bureauof Labor Statistics reported today.

This decline stemmed from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), up by 0.2 percent, outpacing 0.1 percent growth in average hourly earnings for production and nonsupervisory workers.

Real average weekly earnings fell 0.4 percent over the month, as a result of the decrease in real average hourly earnings and a 0.3 percent decrease in the average work week. Since reaching a recent high point in December 2008, real average weekly earnings have fallen by 1.9 percent.

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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

Real Unemployment 16.8 Percent (Not Seasonally Adjusted)

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.

Not many people are aware of the U-6 report that is issued by the Bureau of Labor Statistics. Most news organizations report the more popular Bureau of Labor Statistics--Civilian Unemployment Rate. If you read this report today then you learned that unemployment was 9.4 percent.

Real Unemployment U-6 -- 16.8%

There is another category of unemployed that are not counted in that report. They are described in the U-6 report this way,

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. To view the report go here.

U-6

• Total unemployed
• plus all marginally attached workers
• plus total employed part time for economic reasons
• as a percent of the civilian labor force plus all marginally attached workers

The number reported today for this series is 16.8% .

Not a very pretty picture if you fall in these categories.

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Real National Defense Gross Investment (Graph)

Real National Defense Gross Investment, Quarterly, Billions of Chained 2000 Dollars, Seasonally Adjusted Annual Rate.

FYI.

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U.S. office vacancy hits 15.9 percent

Tip of the hat to our reader, Trader Kev.

• U.S. office vacancy hits 15.9 percent in Q2U.S.
• office rent falls 2.7 percent in Q2.

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US office market continues to spiral down--report

By Ilaina Jonas

NEW YORK, July 7 (Reuters) - The U.S. office market vacancy rate reached 15.9 percent in the second quarter, its highest in four years and rent fell by the largest amount in more than seven as demand from companies and other office renters remained weak, real estate research firm Reis said Inc.

"It's bad," Reis director of research Victor Calanog said. "It's decaying and getting worse. Given the depth and magnitude of the recession, you can argue that we are facing a storm of epic proportions and we're only at the beginning.

The weak demand helped push up the average weighted U.S. office vacancy rate 0.70 percentage points during the quarter and 2.7 percentage points compared with a year ago, according to the report released on Tuesday.

Asking rent during the quarter fell 1.4 percent to $28.43 per square foot. Factoring in rent-free months and improvement costs to landlords, effective rent -- the net amount of cash landlords take in -- fell 2.7 percent in the quarter to $23.42 per square foot. The second-quarter drop was more severe than the first quarter's 2.3 percent, dampening hopes the office market is bottoming out, Reis said.

Year over year, rent was down 6.7 percent, the largest one- quarter decline since the first quarter 2002.

"This is really only the third quarter that we've experienced negative effective rent growth," Calanog said. "Last time, the office sector had four years of negative effective rent growth."

Although the sector has experienced downturns before, the current one may be lethal for lenders and investors who bought property during the boom years of 2005 from 2007. Many of them based the price and the loan on the belief that rents would continue to post strong growth and occupancy increases.

"It's like taking on a lot of debt as an individual and now suddenly earning 10 percent 20 percent 30 percent less," he said.

The dwindling cash flow resulting from higher vacancy and lower rent weakens the ability to repay financing and pushes a borrower closer to defaulting on a loan.

The weak second-quarter performance prompted Reis to maintain its February forecast calling for the U.S. office vacancy rate to top out at 18.2 percent in 2010 and for rent to continue to fall through 2011. It also sees the commercial real estate default rate to reach 4.2 percent by the end of the year and peak at 5.2 percent in 2011.

The U.S. vacancy rate was at 12.5 percent in the third quarter of 2007, but has since risen 3.4 percentage points, Reis said.

Of the 79 markets that Reis tracks, vacancy rose in 65 and effective rent fell in 72, indicating the weakness is widespread.

Vacancy in the New York area, which includes all the New York City boroughs except Staten Island, rose 1.2 percentage points to 10.8 percent, the highest since 1996, and effective rent slid 5.2 percent

"As far as we can tell for New York, the next two years will be murder," Calanog said.

Boston and Orange County and San Jose California saw rent fall more than 5 percent.

Those results do not bode well for office landlords Brookfield Properties Corp (BPO.TO: Quote, Profile, Research, Stock Buzz), Vornado Realty Trust (VNO.N: Quote, Profile, Research, Stock Buzz), Boston Properties Inc (BXP.N: Quote, Profile, Research, Stock Buzz), SL Green Realty Corp (SLG.N: Quote, Profile, Research, Stock Buzz) and Maguire Properties Inc (MPG.N: Quote, Profile, Research, Stock Buzz).

About 20 million square feet of office space came on the market than was rented during the quarter, slightly less than the 25.2 million square feet in the prior quarter.

Year-to-date, a net of 45.2 million more square feet of space put onto the market than was rented, on track with Reis' earlier project of about 67.6 million square feet 2009. If the forecast holds true, 2009 will be the worst year for net absorption of office space since Reis began tracking it in 1980. (Reporting by Ilaina Jonas; editing by Andre Grenon)

Buffett: The Making of an American Capitalist

Real Unemployment Soars to 16.8 Percent (Statistics, Graph)

If you read Table 12 in the Bureau of Labor Statistics report you learned the real unemployment rate is 16.8 percent, not 9.5 percent.

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 9.5 percent for June.

If you read the U-6 you learned the real rate of unemployment is 16.8 percent versus 10.3 percent in June 2008. To view this report and the numbers go here.

Real Unemployment U-6 -- 16.8%


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 June. 618,000 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 793,000 discouraged workers in June, up by 373,000 from a year earlier.
  
• In June, 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 433,000 over the month to 4.4 million.
• In June, 3 in 10 unemployed persons were jobless for 27 weeks or more.

This morning the stock market reacted negatively to this 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.

Subscribe to All American Investor via Email

Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 700 articles with more than 18,000 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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Number of Unemployed Reaches 14.7 Million (Chart)

U.S. Department of Labor: Bureau of Labor Statistics




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Real Unemployment Jumps to 16.4 Percent (Graph)

Not many people are aware of the U-6 report that is issued by the Bureau of Labor Statistics. Most news organizations report the more popular U.S. Department of Labor: Bureau of Labor Statistics--Civilian Unemployment Rate. If you read this report today then you learned that unemployment jumped to 9.4 percent.

Real Unemployment U-6

Source Bureau of Labor Statistics

There is another category of unemployed that are not counted in that report. They are described in the U-6 report this way,

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. To view the report go here.

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U-6

• Total unemployed
• plus all marginally attached workers
• plus total employed part time for economic reasons
• as a percent of the civilian labor force plus all marginally attached workers

The number reported today for this series is 16.4% .

This paints a very ugly picture for the future.

Unemployment rose to 25 percent during the Great Depression.

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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Housing Bargains Galore--Glass Half Full or Half Empty?

You know the saying, glass half full, glass half empty. In today's housing world it depends whether you are a buyer or seller. Buyer good, seller bad. Take a look at this,

In Henderson, Nev., a homeowner is trying to sell the house above for $149,999 -- less than the mortgage – two years after Pulte Homes built it. Ben Prasad of Realty Professionals of LV is the listing broker on the house. Meanwhile, Pulte is offering a similar house nearby, below, for $214,990.

The house in the picture looks like a bargain to me at $149,999. $125,000 bid?

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Foreclosed Houses Haunt Home Builders

By MICHAEL CORKERY and DAWN WOTAPKA

(See Correction & Amplification below.)

As the normally hot spring selling season begins, two houses in the Inland Empire region of Southern California sum up the big problem facing many of the nation's largest home builders.

One of the houses, a four bedroom built in 2006 that was seized by a lender in a foreclosure action, is listed for sale at $229,900. Meanwhile, in the same housing development, D.R. Horton Inc. is trying to sell a new house that looks nearly identical for $299,000, or 23% more.

Or consider Pulte Homes Inc.'s predicament in Henderson, Nev., near Las Vegas. The builder is trying to sell a new, four-bedroom house for $214,990, while a home owner is trying to dump a similar house, which Pulte built two years ago, for $149,999. That price is less than the owner's mortgage under a "short sale" approved by the lender.

In many markets, "we are no longer competing with other builders. We are competing with foreclosures," said Steve Ruffner, president of the Southern California division of KB Home.

Sales of used homes are actually rising in some regions because of foreclosures, but new-home sales fell to a four-decade low in January, down 77% from their peak in summer 2005. Altogether, home builders sold houses at a seasonally adjusted annual rate of 309,000 units in January, down from a peak of 1.4 million in July 2005.

Home builders are confronting the competition from foreclosures at a difficult time in their history. Small builders are dying by the dozens, while some large companies are staying afloat by cutting expenses and scrambling to restructure debt.

President Barack Obama's foreclosure-prevention plan is likely to help stem the supply of bank-owned houses somewhat, and the administration's proposed budget would extend builders a lifeline through a lucrative tax break. But the foreclosure problem won't disappear.

In Henderson, Nev., a homeowner is trying to sell the house above for $149,999 -- less than the mortgage – two years after Pulte Homes built it. Ben Prasad of Realty Professionals of LV is the listing broker on the house. Meanwhile, Pulte is offering a similar house nearby, below, for $214,990.

"I don't know how the builders are going to compete," said Credit Suisse analyst Daniel Oppenheim, who downgraded his ratings for Centex Corp. and D.R. Horton stock last week, partly out of concern about foreclosure competition.

The problem is particularly vexing because many buyers are bypassing new houses for foreclosed ones that are virtually new and are often located in the companies' own developments. "Buyers think they are going to get the best bargain with a foreclosed house, and they aren't even looking at new homes," said Graham Holmes, owner of Reviron Realty, which sells bank-owned properties in the Inland Empire.

Home builders' responses to the foreclosure threat vary. Los Angeles-based KB Home is focusing on building smaller, lower-priced houses that can compete with foreclosures head on. The builder has shrunk its house size from an average of 3,200 square feet during the housing boom to an average of 1,600 square feet in many markets today. "We're finding that if we can get a product to market that is priced competitively with foreclosures, [we] can sell pretty well, even in these times," said Jeffrey Mezger, KB's chief executive.

Dallas-based Centex, on the other hand, says it's not trying to beat lenders on price. Instead, the nation's third largest builder by volume is trying to entice buyers with perks like mortgage interest rates as low as 4.25%, energy-efficient designs and warranties.

D.R. Horton also offers incentives, including covering the buyer's closing costs, and touts a $10,000 California tax credit for buying a new house. And it notes that buyers often need to spend money to fix up foreclosed properties before they can move in.

Builders also argue that while they may look alike, new and foreclosed houses aren't comparable. "Our brand-new homes appeal to the buyer who wants up-to-date features, a chance to make their own selections like carpeting and paint colors," a Pulte spokesman said.

Some buyers clearly agree. "A foreclosure is like a used car," said Danny Hernandez, who bought a new, $237,000, five-bedroom KB house in Beaumont, Calif., in the hard-hit Inland Empire. Mr. Hernandez, a 41-year-old warehouse worker, said the fact KB paid his closing costs and a nonprofit group subsidized his down payment helped make the sale.

Another strategy: build in new neighborhoods that aren't filled with vacant, bank-owned houses. "In general, we try not to compete with foreclosures," said Centex Chief Executive Tim Eller. "It's not all about price, it's about value. Buyers determine value by the look and feel of the neighborhood."

KB said its smaller houses are selling well, but the prices keep sinking. In November, KB was selling its line of smaller houses at a development in Beaumont for as little as $207,990. Now, it has dropped its starting price to $169,990 to match recent foreclosure values in Beaumont. Since it opened the Highland Vista development last summer, KB has sold 28 homes out of about 110 house lots.

Analysts question how low builders can go before building a house costs more than they can charge for it. In some markets in California and Florida, builders have reached that point and have stopped building.

Write to Michael Corkery at michael.corkery@wsj.com and Dawn Wotapka at dawn.wotapka@dowjones.com

Corrections & Amplifications

D.R. Horton is trying to sell a new, four-bedroom house in the Inland Empire region of California for $299,000, or about 30% more than an identical-looking, nearby foreclosed house, which is listed for $229,900. This article incorrectly said it was 23% more.

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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Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now

TALF a Trillion for Commercial Real Estate

If you live in Florida one thing you notice is empty stores in malls. In Delray Beach we have one of those giant strip malls--lots of empty space. It is really startling to see. Restaurants in business for 20 years or more--gone. Circuit City, Linens and Things, you name it gone. And, associated businesses around these anchors--going, going, gone. The mall in Boynton Beach, Walgreens, now closing at 7 PM.

The goal is to head off a “looming crisis” that could spread far beyond “For Rent” signs and shuttered mall shops--Federal Reserve Chairman Ben Bernanke

“Empty stores in a mall deters shoppers just like it deters them in downturn areas if there is vacant space at street level,” says Todd Sinai, an associate professor of real estate at the Wharton School at University of Pennsylvania in Philadelphia. “Then if your retailers stop selling you cannot get new tenants.”

In carrying out the Financial Stability Plan, the Department of the Treasury and the Federal Reserve Board are announcing the launch of the Term Asset-Backed Securities Loan Facility (TALF), a component of the Consumer and Business Lending Initiative (CBLI). The TALF has the potential to generate up to $1 trillion of lending for businesses and households.

Here comes TALF to the rescue. One potato Wall Street, two potato banks, three potato homeowners, and a steak for commercial real estate.

The Treasury is readying a giant bailout for commercial real estate properties as rents fall and vacancies rise. Is this the next shoe ready to drop?

See Fed Press Release and Real estate woes seep into malls, office towers

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Bob DeMarco is a citizen journalist, blogger, and Caregiver. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. The content 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.

Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now