Over 16% Jobless in August

SUBHEAD: Broader American unemployment rate hits 16.8% in August. image above: Unemployed in line for NYC Job Expo. By Phil Izzo on 4 September 2009 in the Wall Stret Journal - http://blogs.wsj.com/economics/2009/09/04/broader-unemployment-rate-hits-168-in-august

Job losses moderated in August, but the unemployment rate ticked up 0.3 percentage point to 9.7%, the highest level since June 1983.

But another more comprehensive gauge of unemployment ticked up even more. The government’s broader measure, known as the “U-6″ for its data classification, hit 16.8% in August, 0.5 percentage points higher than July.

The comprehensive measure of labor underutilization accounts for people who have stopped looking for work or who can’t find full-time jobs. The index had declined last month, along with the headline unemployment rate. That decline was sparked by more people dropping out of the labor force. This month the labor force increased by 73,000 people and the plunge in employment was larger in the household survey, which is used to calculate the jobless rate, than in the payroll survey used to calculate the change in nonfarm payrolls.

The U-6 figure is the highest since the Labor Department started this particular data series in 1994. But, similar to the headline unemployment rate, it likely isn’t as bad as it was in the 1980s. U-6 only goes back to 1994, but a discontinued measure has a longer history. That old U-6 measure peaked at 14.3% in 1982. Through some calculation, a comparable measure can be determined in the current report. Under the old U-6 methodology, the August rate would be 13.3%, the highest rate since 1983, but still below the peak.

Still, the elevated U-6 rate gives a clearer picture of the broader employment situation. The 9.7% unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things.

The U-6 figure includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.

Many forecasters expect the official unemployment rate to top 10% by the end of this year, and the broader rate could easily top 18%. For people in this group, comparisons to the Great Depression (when 25% of Americans were out of work) may not look so wild even if overall economic activity is holding up better.

Rumble in the Number Jungle By Ilargi on 18 Spetember 2009 in Automatic Planet - http://theautomaticearth.blogspot.com/2009/09/september-18-2009-rumble-in-number.html These days I can't seem to look at numbers anymore without asking myself what's behind them. Hey, who can? 90% of them are embellished crappahola, and we're still stuck trying to figure out what they mean if we want to know what lies ahead. Wouldn't a be nice to have a government that's transparent, and doesn't try to pull a fast one on you every chance it gets? Yeah, dream on; here goes another round of number rumbling: The headline may claim that "initial unemployment claims dip", but in reality they have hardly moved at all through summer. As for continuing claims numbers, they are not only up, they're increasingly devoid of meaning, as increasing numbers of people fall off the far end, beyond the duration of unemployment benefits. The worst hit states, where unemployment is highest, and hence tax revenues drop most, will have to pony up the most in additional benefits, as an estimated 1.5 million people will have exhausted all resources by Christmas. For some states, this must cause nightmares already. Especially since it won't stop in 2009; not even the most rose colored forecasters see a significant improvement in jobless numbers any time soon. If you look at the speed at which benefits are running out right now, going from almost zero to 1.5 million "clients" in just a few months, we could see millions of long-time, structurally unemployed soon. A true underclass. Also, the discrepancy between initial claims and official job loss numbers begins to look ridiculous. A slight difference is fine, but 300% is crazy. Then again, that label applies to most US government data. US initial unemployment claims dip. Initial filings for insurance fall by 12,000 to 545,000, but continuing claims grow. The number of Americans filing for first-time unemployment insurance fell last week, while ongoing claims jumped, the government said Thursday. There were 545,000 initial jobless claims filed in the week ended Sept. 12, down 12,000 from a revised 557,000 the previous week, the Labor Department said in a weekly report. A consensus estimate of economists surveyed by Briefing.com expected 557,000 new claims. The 4-week moving average of initial claims was 563,000, down 8,750 from the previous week's revised average of 571,750. The government said 6,230,000 people filed continuing claims in the week ended September 5th, the most recent data available. That's up 129,000 from the preceding week's revised 6,101,000 claims.


Mauibrad said...

Almost everybody knows that the federal government unemployment statistics are "crappahola" as the above author calls them. What's interesting is that the federal government keeps using them, thereby diminishing it's standing and distancing itself from the trust of the American people. No wonder Americans have such low regard for the federal bureacracy, Congress, and increasingly so the President as measured by Gallup. There is a divergence here between reality (what my lyin' eyes tell me) and the charade that the federal government persists in trying to have the people believe. This charade continues under Obama.

Mauibrad said...

Also wanted to comment, the expression on that lady's face says a lot.

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