Truer U.S. Unemployment Rate Rises to Recent High of 17 Percent
As regular readers of this blog know, each month when the official U.S. unemployment number comes out, I like to go behind the number and find the truer measures of joblessness in America, using the Labor Department's own numbers.
I was out last Friday when the September jobless numbers came out, but that doesn't mean I'm slacking in my duty. I'm on it today.
The official U.S. unemployment rate in September rose to 9.8 percent from 9.7 percent in August, the Labor Department's Bureau of Labor Statistics reported Friday.
But as I've written several times, that's only a certain kind of unemployed American, not everyone who should be working full time but is not or cannot. The Labor Department calculates the monthly figure with data provided by a rotating monthly survey of 60,000 households, which are asked specific questions, such as, "Have you looked for work in the past X weeks?" and by jobs data provided by employers.
You can take issue with the way the Labor Department does this survey, and I do. But it is a statistically sound way to count one segment of the unemployed.
That being said, there are two other numbers that paint a more accurate picture of joblessness in the U.S.
The first is the total number of people who are either unemployed, who are working part time but would rather be working full time and those who have simply given up looking for work because they are too discouraged by their bleak prospects.
This number in September rose to a staggering 17 percent, up from 16.8 percent in August. The new number is an all-time high for as far back as the Labor Department has been keeping this figure, which goes back to January of 1994, when the department changed the way it counted the unemployed.
However, many economists I've spoken to say that this is exactly the way the Labor Department counted unemployment during the Great Depression, when joblessness peaked at an all-time high of 25 percent.
If that's right, think about that: Unemployment in the U.S. is only 8 percent lower than it was during the darkest economic time in this nation's history.
I recently got a nice note from former Washington Post Business reporter John Berry, a lion of economics journalism. He argues that instead of touting the 17 percent number, I should instead report another Labor Department figure, which removes the part-time workers from the number because they are working, even though they are not working as much as they want.
The unemployment rate John is touting was 11.1 percent for September, another high going back to 1994, and up from 11 percent in August.
That number is arguably less painful than the 17 percent figure, but not much, honestly.
The bottom line on jobs is that most forecasters and the White House predict the official unemployment rate will crest at more than 10 percent, which means the worst-case unemployment rate will push toward 20 percent.
The worst part about this forecast is that you should not expect the jobless rate to start declining as soon as it crests. Unemployment has remained high for several months after previous recessions have ended.
Since this recession began in December 2007, 7.6 million Americans have lost their jobs. Frankly, I don't know where the new jobs are going to come from.
-- Frank Ahrens
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October 5, 2009; 2:00 PM ET
Categories: The Ticker | Tags: Bureau of Labor Statistics, Labor Department, joblessness, unemployment
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