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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Actual Unemployment Rate Hits All-Time High of 16.8%

As regular readers of The Ticker know, we like to hammer on the official U.S. unemployment rate versus the unofficial rate, which we believe to be a truer picture of joblessness in this country.

This morning, the Labor Department said the official number climbed from 9.4 percent in July to 9.7 percent in August.

But the unofficial number jumped from 16.3 percent to 16.8 percent.

The difference between the two rates is due to who's counted among the unemployed.

The official number is arrived at by combining a rotating monthly survey of 60,000 U.S. households performed by the Labor Department's Bureau of Labor Statistics with jobs data sent in by employers. According to this measure, you are marked as "unemployed" if you're jobless and you meet certain criteria, including whether you looked for work in the previous four weeks.

The unofficial number starts with the official rate and then adds in everyone else who should be working full time but is not, including those whose hours have been reduced from full time to part time, those who have become so discouraged they have given up looking for work and others who are "marginally attached to the labor force." Many economists believe this rate is a truer measure of the health of the economy.

Last month, we did some numbers-crunching and found that unemployed Americans are so discouraged about the prospect of finding a new job that they're checking out of the labor force at the highest and fastest rate in nearly 10 years. Further, the recession has forced more full-time workers into part-time slots than at any time over the past 15 years.

You can read our entire analysis by clicking here.

We know that unemployment has continued to rise for several months after past U.S. recessions have ended. Many economists and even the White House have said (hoped?) that the official number will top out around 10 percent. But even if that's the case, you should not expect it to suddenly start dropping back down as soon as it peaks. Good guesses say it could be a matter of years before the official unemployment rate gets back down to a figure we're more used to seeing, something in the 5 percent range.

As for the unofficially employed -- now numbering nearly twice the officially unemployed -- the wait could be longer.

-- Frank Ahrens
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By Frank Ahrens  |  September 4, 2009; 12:02 PM ET
Categories:  The Ticker  | Tags: unemployment  
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Next: Why Bernanke Might Have Told Obama: Thanks, But No Thanks For Second Term

Comments

Two questions:

How long is "all time?" (As in "Actual Unemployment Rate Hits All-Time High of 16.8%.")

And in what category do you put people who are working full time but are getting paid under the table?

Posted by: chaos1 | September 4, 2009 2:29 PM | Report abuse

The Bureau of Labor Statistics used to publish a figure on the percentage of our job age population that was actually employed in any given month. Personally I found this figure to be more revealing than the normally seen "unemployment rate," which provides an unrealistically low estimate, probably really only about half the actual percentage of Americans who are really unemployed but wish to be working.

Of course, that figure included those whose circumstances allow them not to work at all, like early retirees, non-working spouses and the like. But its fluctuations from month-to-month provided a much better measure of how we're really doing than does the "unemployment rate," which sometimes has the weird effect of falling in some months when the number of jobs is declining overall, which if it were a true measure would be statistically impossible unless our working-age population were actually to shrink more rapidly than the job losses were taking place.

The percentage of employed people (for which, unlike for the unemployment rate, higher is better) would fluctuate within a range in the mid- to high-60s down into the low-60s, and if you plotted it against Democratic and Republican administrations it was like throwing a switch -- historically it would always rise as soon during Democratic administrations and fall as soon as Republican policies governed us.

I believe that this unreported figure would provide a much better measure of our prosperity, if only I could still find it posted somewhere.

Posted by: FergusonFoont | September 4, 2009 2:31 PM | Report abuse

Didn't Biden just say the stimulus is a massive success?

Posted by: Bubbette1 | September 4, 2009 2:52 PM | Report abuse

Somebody always needs to carefully calculate how many millions of dollars per minute that are appropriated. If not, you end up with Enron or worse. Unemployment can be good. People are still willing to pay the market price for a share of stock if it's a good buy on any day of the week. What we did and do matters. You know.

Posted by: Dermitt | September 4, 2009 3:37 PM | Report abuse

OBAMA WILL CONTINUE ATTACKING SMALL BUSINESSES

with mindless regulations, taxes, and harassment.

and small businesses are THE main source of USA jobs.

How many business persons on Obamas cabinet?? ZERO.

OBAMA--Stuck on stupid

But if YOU lost YOUR job this month--Cheer up!!

Obama says its not as bad as expected.

So now, don't you feel better already???

Posted by: JaxMax | September 4, 2009 3:38 PM | Report abuse

JaxMax How could you say this is Obama fault?.Where was you the last 8 years, this was a situtation made by and hided by the Bush admistration.Oh I guess you have forgotten how a watchdog reported how he was willing to sell our water ports the main ports that brings in our imports to the same people he claim we was fighting.Bush made this mess.In his two terms we lost several large company/ jobs to over seas countries.Obama is trying to get us out of this mess, and back to work. So if you want to blame someone, how about blaming youself, did you speak up or out when these things was happen? I DID.

Posted by: c64310 | September 4, 2009 5:01 PM | Report abuse

Likely, Jaxmax believes that the unemployment situation is Obama's fault because he also believes that Obama was born in Kenya and is not a citizen, wants to murder your Grandmother by unplugging her ventilator, and wants to convert your school-age children to socialism by telling them to go to school and study hard. Simple, isn't it.

Posted by: cms1 | September 4, 2009 7:13 PM | Report abuse

The rabid right blames it all on Obama, as if the crisis has not been 12 years in the making, thanks to corporate incentives to outsource US jobs and move manufacturing overseas. During the 8 GWB years all right wing hack were parroting the phrase"We now have a service economy."
Well, if you don't make anything then you have nothing to service. I hope you like your greeter job at Wallmart.

When you're a desparate shill you don't need an excuse.

Posted by: Single_Payer | September 4, 2009 9:00 PM | Report abuse

Service economy started under clintoon.

I remember, I was an econ major at the time. You can read my classmates opinion: We can base an economy on service without manufacturing.

That was the title of his thesis. Well he got an A, while I wrote one about the internet bubble and how pets.com could not actually be worth more than all the domestic airlines combined... I had to rewrite mine. Oooops, my professor was fired; and I was invited for a guest lecture and an honors degree for graduating econ majors.

Posted by: docwhocuts | September 5, 2009 6:36 PM | Report abuse

Jobless Recovery Like Ice Cream Without Cream.
The stated unemployment rate is 9.7%.
The unemployment rate for college educated is approximately 4.2%.
The unemployment rate for high school graduates is approximately 15%.
The unreported facts:
*1,400,000 foreclosures in 2008, and 1,800,000 in 2009 *Millions of separate small business bankruptcies *About 1.5 Mil short home sellers
*Indeed, there are more than 6,000,000 one-time homeowners and business people who will not be eligible for home mortgages, and thus, out of the home buying market.
*And, there are over 3,000,000 small business people who have lost their businesses, many of them in their 40’s, 50’s and 60’s who can’t get a job *They are not even counted in the 9.7% unemployment rate
*If they were counted, real unemployment would be more like 15%.

Wall Street and the U.S. Government will “pitch” we’re on track for a jobless recover. This P.R. will be all you will hear from now on since Wall Street and the U.S. Government desperately will do whatever they have to do, to try to artificially build consumer confidence and consumer spending.
Don’t fall for this latest P.R. tactic. When you start hearing this Jobless Recovery mantra day in and day out, protect yourself and avoid being fooled again. Become a prudent American consumer:

Don’t buy stocks. (Remember, I forecast an 8,000 DOW)
Be patriotic to yourself and don’t consume. (Just buy essentials)
Listen closely and be suspicious of anyone promoting a jobless recovery.

This is the only way to force Wall Street and Big Business to invest in job creation.

Warmest,

Richard Michael Abraham, Founder
The REDI Foundation www.redii.org info@redii.org

Posted by: info96 | September 6, 2009 4:58 PM | Report abuse

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