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

Truer U.S. unemployment rate drops to 17.2%

The truer rate of unemployment in America dipped to 17.2 percent in November, down from its recent historic high of 17.5 percent in October.

As regular readers of this blog know, I like to dive into and unpack the national unemployment data when they come out each month to find a truer picture of unemployment than is painted by the headline-grabbing rate that is first reported. In today's case, the headline is that U.S. unemployment has dropped to 10 percent in November, down from 10.2 percent in October.

That number is not a lie or a purposeful obfuscation -- but it is only one way to count the unemployed. I believe it is too narrow of a definition of unemployment and one that does not take into account the wider misery caused by this recession.

Both numbers come from the Labor Department's Bureau of Labor Statistics.

The headline number -- 10 percent -- is arrived at by the BLS collecting data from employers and conducting a monthly survey of 60,000 rotating households. The BLS asks clearly defined questions -- "Did you look for work in the past X weeks?" and so on. The reason they do this is because if you ask an open-ended question -- "Are you unemployed?" -- you'll get useless data, because peoples' definition of unemployment differs.

As I said, that is one way to collect data. But the number that survey comes up with -- in this case, 10 percent unemployment -- does not take into account all the people who should be working full-time but are not. Specifically: people who want full-time jobs but can only find part-time ones and the unemployed who have become so discouraged that they have given up looking for work.

That number in November stood at 17.2 percent, down from 17.5 percent in October, a recent high. As a way of comparison, the worst unemployment in the modern U.S. -- 25 percent -- came in 1933, in the nadir of the Great Depression.

Another way to look at today's unemployment numbers: If you take out the part-time workers who would rather be working full-time but keep in the discouraged ones, the November unemployment rate was 11.3 percent, down from the recent historic high of 11.6 percent in October.

What's the takeaway from today's numbers? Unemployment, any way you slice it, is still at its highest rates since the early-'80s recession. This continues to be a huge political problem for the White House and the vulnerable members of Congress who face midterm elections next year.

That being said, today's dip in the rates is a bit of a breather for the White House, and it comes only one day after President Obama held his big jobs summit, in which he invited business leaders to the White House to try to come up with ways to bring down unemployment.

A cautionary note: We won't know until this time next month whether today's dip is a trend or a blip. Remember back in July, the official unemployment rate dipped to 9.4 percent from 9.5 percent in June. In August, it went right back up to 9.7 percent and continued climbing until today.

That was a statistical blip caused by a troubling fact: So many unemployed Americans had become discouraged and checked out of the labor force that it actually shrank a statistically meaningful amount, temporarily bringing down the unemployment rate.

And one other cheery note, while I'm at it: If today's 10 percent figure ends up holding as peak unemployment, don't expect it to start dropping right away. History tells us that unemployment rates either continue rising or at least stay very high for months -- if not quarters -- after previous recessions have ended.

-- Frank Ahrens
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By Frank Ahrens  |  December 4, 2009; 11:08 AM ET
Categories:  The Ticker  | Tags: unemployment  
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Comments

Is this a seasonally adjusted figure?
Why isn't unemployment figured from those who apply for unemployment benefits? Apply not who are given a check.

We all know that there are companies who hire for the holidays!

It would seem that job creation would be the idea not getting companies to hire who do not need employees because the government pays for it.

Posted by: bstanstout | December 4, 2009 12:20 PM | Report abuse

No doubt the rightards will have any number of "reasons" for deriding this obviously good news. They hat it when America does well. Ayatollah Limbaugh issued a ftwah months ago delaring that the faithful must work to make America fail, and they have been tireless in trying to heed his call.

Posted by: John1263 | December 4, 2009 12:40 PM | Report abuse

the true rate is well over 20%, but for obama's sake, you want to keep it at 17.2...
sad...

Posted by: DwightCollins | December 4, 2009 12:45 PM | Report abuse

In response to bstanstout: BLS releases the seasonally adjusted rate to the press. The unadjusted rate is available on their website. A change of .2 percent unemployment is considered statistically significant - in other words it is likely not a fluke. A change of less than .2 should be considered to be "trivial" and should be interpreted as the rate is essentially the same. So the change from 9.5 to 9.4 mentioned above should technically be interpreted as remaining the same for that month.

Posted by: DrS1 | December 4, 2009 1:03 PM | Report abuse

The survey's extrapolation (a guess at best) is contradicted by actual unemployment filings by 1.95 million people in November. If the jobs number is still negative, and we had another 150,000 new entrants into the labor force last month, while older workers are not retiring (or dying) at the same pace as a couple of years ago, how could the rate decline unless more people are simply dropped from the roles. But that is not what is reported either.

I agree that these numbers are (WHEW!) just in time for the administration's lack of interest in the lives of ordinary Americans. But how many ordinary Americans are wearing those government-issue, rose-colored glasses that enable them to see the illusions that the government is offering?

Posted by: infuse | December 4, 2009 1:25 PM | Report abuse

"UPS Air and International Services will increase a net 4.9% through a combination of a 6.9% increase in the base rate and a 2% reduction in the Air and International Services fuel surcharge." Source: UPS

Since home delivery of the newspaper isn't going up, we should have the newspapers providing home delivery of packages. You guys have plenty of trucks and FedEx is going up too. All delivery is local, just like the news. Things are tight and we're going to raise it 7%, but reduce it 2.1% all to serve you better.

Posted by: Dermitt | December 4, 2009 2:05 PM | Report abuse

Let's decide on one unemployment rate or the other and stop using both for political ping-pong games, okay?

Posted by: st50taw | December 4, 2009 2:51 PM | Report abuse

Bureau of Labor Statistics
In November, both the number of unemployed persons, at 15.4 million, and the unemployment rate, at 10.0 percent, edged down.

Total nonfarm payroll employment was essentially unchanged in November (-11,000). Job losses in the construction, manufacturing, and information industries were offset by job gains in temporary help services and health care. Since the recession began, payroll employment has decreased by 7.2 million.

The health care industry has added 613,000 jobs since the recession began in December 2007.

Wake up America, the jobs of the 21st century are not the computer jobs being directly exported, but the jobs of the bedpan that can not be exported.

This Christmas buy a bedpan instead of a computer and start practicing at home for the American jobs of the 21st Century.

http://www.bls.gov/news.release/empsit.nr0.htm

Posted by: bsallamack | December 4, 2009 4:37 PM | Report abuse

How are the numbers for "employed part-time but would rather be employed full-time" calculated? Or the "discouraged"?

There are of course a substantial number of adults that don't absolutely need to work full-time, or chose not to, or whatever (homemakers, primary caregivers, early retired, college students, gap-year folks, foreigners here on non-work visas, etc).

Hopefully the methodology for "true unemployment rate" here isn't crippled by some kind of moralizing view that anybody of working age must prefer to be full-time employed...

Posted by: omarsidd | December 4, 2009 4:50 PM | Report abuse

No one seems to be speculating as to whether the welcome reduction in the high unemployment rate, however determined, is partly or largely a result of more people being temporarily hired in retail businesses for the Christmas season.

Posted by: Aprogressiveindependent | December 5, 2009 12:40 AM | Report abuse

When the IRS sees the tax returns plummet by 80% they
will realize that America is in a Great Depression.

Posted by: blakesouthwood | December 5, 2009 1:32 AM | Report abuse

Meantime, with 15 million Americans without jobs, & Millions more working temporary & part time jobs, The invasion continues no Liberal Politician will address the 500 pound gorilla in the room, and millions of invading, plundering, welfare loving, prolific breeding, Illegal Aliens taking millions of jobs that should be American jobs and 100,s billions of dollars in social services that should be for American citizens!

One cannot be political correct and admit that Illegal Aliens are an large part of the problems in this Nation.

Their negative impact extends to every area from Sub-par loans & defaults, Underground economy, Massive document fraud, Lower standard of living, Crime, Overflowing prisons , Bankrupted hospitals, Failing schools, Property Taxes, Insurance costs, Environment, Culture, Welfare costs, Welfare fraud, SS fraud, Voter fraud, Disrespect for our laws & country, our Constitution against invasion and even Balance of payments occurring from oil and other imports to support the 20 to 30 million illegal aliens in this country!

One has to only look at Calif. which is basically mostly an Spanish speaking, Bankrupt state that cannot afford to provide Welfare, Schooling, Medical, Prison cells etc. for millions of MS-13 Gang bangers, Drug dealers, Rapist and other assorted Criminals and uneducated, Prolific breeding, third world rejects from Mexico!

In a very few years it will be impossible to see where Mexico ends and Calif. begins as both will be an third world cesspool!

Failure to secure our borders and reward the Invading horde for their invasion and their relatives in an never ending chain with American Citizenship is nothing less than committing National Suicide & will assure our future is an over populated Spanish speaking third world Nation that is an Cesspool of Corruption, Crime, Poverty and Misery modeled on Mexico!

Posted by: american1 | December 5, 2009 9:43 AM | Report abuse

I don't want to sound too cynical, but yesterday's numbers were awfully unexpected and very convenient in their timing given Obama's jobs creation "summit".

I wouldn't be surprised if the figures are later revised upward.

This might be a good gold buying opportunity.

Posted by: ephemerella | December 5, 2009 10:02 AM | Report abuse

"the true rate is well over 20%, but for obama's sake, you want to keep it at 17.2...
sad...

Posted by: DwightCollins | December 4, 2009 12:45 PM"
*********************************************
No, no. That's the percentage of tea-baggers who graduated from high school.

Posted by: st50taw | December 5, 2009 10:05 AM | Report abuse

American1 wrote @ 12/5/09 9:43 AM
“Meantime, with 15 million Americans without jobs, & Millions more working temporary & part time jobs, The invasion continues no Liberal Politician will address the 500 pound gorilla in the room, and millions of invading, plundering, welfare loving, prolific breeding, Illegal Aliens taking millions of jobs that should be American jobs and 100,s billions of dollars in social services that should be for American citizens!”

You want to stop illegal’s! Start jailing and fining employers who hire Illegal aliens! Conservative politicians won’t do that because they don’t care about Americans working, they would rather send the job over seas.

Posted by: knjincvc | December 5, 2009 11:08 AM | Report abuse

Nice article. Thanks for covering the truer unemployment rate.

Meanwhile the incompetent Odumbo has his administration issuing 125,000 green cards to foreigners each month.

I guess the dumbas$ thinks that the U.S. unemployed citizens need more competition for the jobs his administration isn't creating.

What a disgraceful failure Odumbo and his cabal of egghead leftists are.

Are all you class envy nitwits enjoying Odumbochange?

Posted by: LarryG62 | December 5, 2009 1:13 PM | Report abuse

Americans companies that received 68 billion from the TROUBLED ASSET RELIEF PROGRAM are now planning to show their gratitude to America by directly export more American jobs.

India may get $1 billion in IT outsourcing contracts: report
Reuters November 23, 2009
MUMBAI (Reuters) – Leading Indian outsourcers such as Tata Consultancy, Infosys and Wipro stand to gain contracts worth about $1 billion in the next one or two years as U.S. banks emerge from the TROUBLED ASSET RELIEF PROGRAM, the Economic Times reported on Monday.

The newspaper said JPMORGAN, GOLDMAN SACHS and MORGAN STANLEY that received approval to buy back government stake worth $68 billion earlier this year are among the firms seeking operational efficiencies by outsourcing non-core IT and back-office projects to India.

Either Congress stops this rape of American jobs or America will be left with only the non exportable jobs of the bedpan,mop, and shovel.

No nation can not simply lose the computer related jobs of the 21st century and believe there will be prosperity.

Posted by: bsallamack | December 5, 2009 3:14 PM | Report abuse

Employment is neither a God Given Right, nor is it guarunteed under the U.S. Constitution. And if you find yourself out of a job, then take responsibility for your situation, get some direction, and improve yourself and your situation. For the only person that is going to help you recover is yourself ... Not your Government, not your God, not the President, but yourself. And Life is tough, so get tougher, be realistic, stay focused, retain your sense of self worth, and have a much happier time during the Holidays ! And may God Bless what is left of America.

Posted by: jralger | December 5, 2009 4:01 PM | Report abuse

Employment is neither a God Given Right, nor is it guarunteed under the U.S. Constitution. And if you find yourself out of a job, then take responsibility for your situation, get some direction, and improve yourself and your situation. For the only person that is going to help you recover is yourself ... Not your Government, not your God, not the President, but yourself. And Life is tough, so get tougher, be realistic, stay focused, retain your sense of self worth, and have a much happier time during the Holidays ! And may God Bless what is left of America.

Posted by: jralger
...............................
If government can not act so that American jobs are not directly exported than Americans have to think of the alternatives.

In a country without jobs and where there will never be jobs since the jobs of the 21st century are simply being directly exported, those that are educated simply should leave the country.

This is the only advice for the new graduates of colleges and universities.

Seek your future in Canada or another country since this nation is doomed to failure in believing it can simply turn its back on the 21st century and allow all of the jobs of the 21st century to be directly exported.

Remember that the United States is the only country in the world that allows companies of their country to directly export jobs. These will be the nations that will survive and not die from national suicide.

Posted by: bsallamack | December 5, 2009 5:44 PM | Report abuse

My son has been a realtor in our small town for 25 years. Most homes in our area are well below the $400,000's. He's never made a six figure salary and he receives no employee benefits. This means he pays for his own retirement benefits and health insurance. He is also not included in the government's unemployed ranks. He receives no unemployment benefits either, so he is left at the mercy of those who can help him.

We are retired but for the past two years we have helped support him from our monthly pensions and some of our limited savings. He has been using his own retirement funds to live on. Who wants to hire a 48 year man who's only career has been in real estate? For two years he has not received even one reply to the many job applications he has sent out.

I spoke with a hairdresser who is also not counted in the unemployment statistics but is not entitled to any unemployment benefits and receives no benefits from her employer. So the statistics really don't give a clear picture of how so many are suffering.

Posted by: papafritz571 | December 5, 2009 7:54 PM | Report abuse

So the statistics really don't give a clear picture of how so many are suffering.

Posted by: papafritz571
==================================
Look, we all know people are suffering but your comments are like saying the Yankees won the World Series but that doesn't tell us about the Superbowl. The unemployment figuires (whichever set you choose) tell us about unemployment not about employed people who do not have health benefits or a pension.

Posted by: pjjacobs | December 5, 2009 8:11 PM | Report abuse

ECONOMY - JOBS - BAILOUTS - and - WHY?! - DEVIVATIVES & SPECULATION by so many Criminal $Greedy Globalist Banksters!! - And CONGRESS wants to keep maintaining the un-Constitutional private corpoaration called the "FED"!!?? - REPEAL the Federal Reserve ACT NOW!!!! -- read:- What is the real reason behind Fed Secrecy?
*Texas Straight Talk, by Congressman Ron Paul, September 28, 2009:
“The fact is that the Fed comes to Congress and talks about only what it wants to talk about, and the GAO audits only what the current laws allow to be audited. The really important things however, are off limits. There are no convincing arguments that it is in the best interests of the American people for anything the Fed does to be off limits.

It has been argued that full disclosure of details of funding facilities like TALF and PDCF that enabled massive bailouts of Wall Street would damage the financial position of those firms and destabilize the economy. In other words, if the American people knew how rotten the books were at those banks and how terribly they messed up, they would never willingly invest in them, and they would fail. Failure is not an option for friends of the Fed. Therefore, the funds must be stolen from the people in the dark of night. This is not how a free country works. This is not how free markets work. That is crony corporatism and instead of being a force for economic stabilization, it totally undermines it.

If the Fed gave its actual arguments against a full audit, they would not have mentioned anything about political independence or economic stability. Instead they would admit they don't want to be audited because they enjoy their current situation too much. Under the guise of currency control, they are able to help out powerful allies on Wall Street, in exchange for lucrative jobs or who-knows-what favors later on. An audit would expose the Fed as a massive fraud perpetrated on this country, enriching a privileged few bankers at the top of our economic food chain, and leaving the rest of us with massively devalued dollars which we are forced to use by law. An audit would make people realize that, while Bernie Madoff defrauded a lot of investors for a lot of money, the Fed has defrauded every one of us by destroying the value of our money.”

Posted by: jward52 | December 6, 2009 8:12 AM | Report abuse

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