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

Truer unemployment rate rises to 17.1%

WASHINGTON - AUGUST 1:  Keith Hall, Commission...

Image by Getty Images via Daylife

Each month, as regular readers of this blog know, I unpack the data released by the Labor Department's Bureau of Labor Statistics (BLS) to get beyond the headline unemployment rate number and find out what the numbers are really telling us.


The headlines this morning: The official U.S. unemployment rate rose from 9.7 percent in March to 9.9 percent in April, even as the economy added 290,000 jobs. This happened because a number of unemployed Americans who had stopped looking for work decided to try to re-enter the job force last month. They are called "discouraged" workers. They were not counted as unemployed because, according to the Labor Department, you're unemployed only if a) you're out of work and b) you've looked for work in the previous four weeks. A whole bunch of people who had stopped looking for work started again last month, increasing the size of the labor pool. Not all of them found work, so the unemployment rate ticked up.

That's good news, but that said, a truer measure of U.S. unemployment also increased last month. If you also include all of the people who are still discouraged and all of those who want to work full time but can find only part-time work, that unemployment rate in April was 17.1 percent, a rate that has increased since the beginning of the year and is approaching its all-time high of 17.4 percent, hit in October.

What's going on? If discouraged workers are re-entering the labor force, why is the higher unemployment rate still climbing?

The answer seems to be found among those who are forced to work part time but who want to work full time. That number has increased since the beginning of the year.

In January, Labor reported that 8.3 million Americans were working part time for economic reasons, meaning they could not find full-time work. That number increased to 8.8 million in February, 9.1 million in March and 9.2 million in April.

The number of discouraged non-employed Americans in April was 1.2 percent, up from 1.1 million in January.

According to Tom Nardone, the BLS's assistant commissioner for employment analysis, one of the reasons the higher unemployment number went up was because the lower number went up, simple as that sounds. What he means: In addition to the part-time workers and the discouraged non-workers, the higher number also includes the official number, which went from 9.7 to 9.9 percent.

But there are also other factors that are often hard to quantify in such a large sample, Nardone said. For instance, depending on how the BLS survey questions were answered, an unemployed discouraged worker in April may not have been classified as such in March.

So fair enough. Regardless of the reasons, an official unemployment rate of 9.9 percent -- and a truer rate of 17.1 percent, both on the rise -- are politically unacceptable, ensuring that jobs will be a key issue in November's midterm elections.

By the way, click here to read an interview I did with BLS Commissioner Keith Hall (pictured) on how his agency counts the unemployed.

Follow me on Twitter at @theticker.

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By Frank Ahrens  |  May 7, 2010; 5:30 PM ET
Categories:  Data , The Ticker , Unemployment  | Tags: Discouraged worker, Economy, Employment, Labor force, Unemployment, United States, bureau labor statistics, joblessness, official unemployment rate, part-time workers, unemployment rate  
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Posted by: itkonlyyou48 | May 7, 2010 11:56 PM | Report abuse

We need to extend benefits for the millions out there that are effected by this.

I really don't want over a million unemployed people on the streets.

http://www.change.org/petitions/view/the_99ers_need_a_tier_v_added_to_unemployment_benefits

Posted by: Tim_incubator | May 8, 2010 12:10 PM | Report abuse

so you are saying that every time some one applies for a job that the gov't knows about it? that every employer in the country reports now many applications they get each month? there is no way that is true.

Posted by: tomm4 | May 8, 2010 12:47 PM | Report abuse

Obama and this administration have shown that they will lie, bribe, threaten, break knee caps and do whatever they need to do to destroy what has made this Nation great. The massive government takeover of health care, banking, financial and now the Internet is a march of a statist government bent on doing what they know is right for us, whether the People want it or not.

As to the manipulation of the labor numbers Mark Twain said:

"Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force: "There are three kinds of lies: lies, damned lies and statistics.""
- Mark Twain's Own Autobiography: The Chapters from the North American Review

Posted by: Bubbette1 | May 8, 2010 1:23 PM | Report abuse

I am so sick and tired of them snowballing us and telling us that there are jobs out there. Where are all of these jobs they are talking about? They can fudge numbers any way they want to make it look to their favor. This Administration and Government wants the American people to believe they are creating jobs; when in fact we the unemployed know that is not the case.

Now our Administration and Government is once again going to slap the long-term unemployed in the face by sending financial support to Greece to help “bail” them out. What about helping out the American's who are suffering in our country????
Here is the address to a petition just started today by Issa Decker, who authored the original 99ers petition. It expresses the anger of the American unemployed demanding that they help American's before they bail out Greece. Please sign this petition and let's get our anger voiced. Please also pass on the site address to all sites you can find regarding unemployment. WE HAVE TO GET OUR GOVERNMENT TO HEAR OUR ANGRY VOICES!!!!
http://uspoverty.change.org/petitions/view/no_money_for_the_greek_unemployed_before_adding_tier_extensions_for_the_american_unemployed

Posted by: Ashado | May 8, 2010 2:30 PM | Report abuse

Thats right OBAMA LIED AGAIN !!!!!!!!the BLS data created 185,00 jobs out of thin air folks so don't believe anything you here and always look at the data !!!!because this administration is a BEHEMOTH LYING MACHINE !!

Posted by: yourmomscalling | May 9, 2010 7:23 AM | Report abuse

While total employment has shown steady improvement, the real long-term concern is Germany, which is betting the house on the euro. A spread in the Sovereign debt crises to Spain and Turkey will quickly lead to Germany, a prospect which would have very negative ramifications for the U.S.

Kenneth Hackel, C.F.A
credittrends.com

Posted by: kenhackel | May 9, 2010 1:02 PM | Report abuse

There are over 26,000 people that have emailed congress from Change.org asking for Tier 5. Those are just the people have have found the petition and have net access. http://www.change.org/petitions/view/the_99ers_need_a_tier_v_added_to_unemployment_benefits

For the last eight weeks, Initial Unemployment Claims have averaged 450,000 per week. So, over the last four weeks [the month counted], 1.8 million people were laid off. How does that fit in with the claim that 290,000 new jobs were created? The obvious answer is that it doesn’t

The CES Birth/Death adjustment added 188,000 of those jobs. Birth/Death does not refer to people but to businesses. The BLS guesses how many new companies opened versus how many closed their doors. The BLS then uses that guess to guess again how many jobs those business created or lost.

Another 66,000 of the new jobs came from census hiring
Another 26,000 of the new jobs were non-census temporary
Let’s recap:

A guess produced 188,000 of the jobs, 66,000 were census and 26,000 were temporary.
280,000 of the 290,000 “new jobs” were either temporary or the result of guesswork.


Hollywood Video just laid off 12,000 workers.

The American public is seeing the the unemployment rate is increasing and that any gains are made by people exhausting their benefits and thus falling off the unemployment count.

What is it going to take for Congress to act?

Posted by: Tim_incubator | May 12, 2010 2:38 PM | Report abuse

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