Imagine a 17% Unemployment Rate? We're There

The U.S. employment data statistics make for sober reading. (Click to enlarge)

Here are some comments from Mike Shedlock's blog in reference to the table above.

The official unemployment rate is 9.8% and rising. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

As can be seen the U-6 number currently stands at 17% which gives a better estimation of the extent of under-utilization of the U.S. labor force (and the concomitant hard times) than the U-3 statistic.

Comments

[Michael Clark:]

No one wants to start telling us the truth about unemployment. 17% is a reason to clamor for a revolution. 9.5% is a reason to shout about the government and have another drink.

Oct 04 07:02 AM

[Mad Hedge F...:]

cft For the last six months there has been a great big whopping contradiction in the markets. The stock market has been discounting a return to the “Roaring Twenties,” while the bond market has been anticipating another “Great Depression.” After yesterday’s publication of the Labor Department’s September nonfarm payroll number showing the loss of another 263,000 jobs, it looks like the bond market now has the upper hand. This takes the unemployment rate up 0.1% to 9.8%, and total job losses for this recession to 7 million. The really disturbing aspect of this number is that 57,000 teachers were fired, as states chop budgets to the bone. This is really eating our seed corn by the bushel full. Of course, I have been banging pots and pans, setting off distress flares, and yanking the fire alarm, trying to alert readers that this kind of disappointment was coming (click here for “Risk Reversals Can Be Such a Bitch” and here for “Stocks Offer No Value”). Shares have dropped 5% from last week’s peak, as the bond market soared, the ten year yield reaching nosebleed territory of 3.05%. The dollar maintained its flight to safety status, which to me is one of the great ironies of all time. It’s like that reprobate, alcoholic uncle with the bad teeth, who, when your car breaks down in the middle of a downpour in a bad neighborhood, will always let you crash on his sofa. Let’s call him your Uncle Sam. You have to hand it to PIMCO’s inveterate card counter, Bill Gross, who says this is all about transitioning to a “new” normal of 1%-2% real GDP growth. That’s why he was loading the boat with bond yields at 4%, a “ballsey” move at the time, which now smells like roses. I guess that’s why they call him the “Bond King.”

Oct 04 09:58 AM

[Denis Gould:]

17% is a scary number but even more so is the fact that the feeback loop between job losses leading to lower spending leading to more job losses is still firmly in place.

Oct 04 08:39 PM

[snagglesnarf:]

We know the official rate will continue to climb because Alan Greenspan just called 10%. Alan is going way out on a limb here but we all know he is the smartest guy around- which is why we're screwed.

Oct 04 10:44 PM

[Fighting Yoda:]

Another additional tidbit came from BLS with the latest report- they have under reported unemployment: "The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 824,000 jobs in the 12 months ended March 2009. "

So additional 824K losses have been estimated by BLS but for some reason the revisions will be officially announced only next Feb. That itself will contribute to .5%+ additional unemplyment.

Oct 05 12:56 AM

[Homer II:]

Clive, I think your 17% number is too low. I prefer the SGS number at 22% because it accounts for more of the "still-unemployed-but-... and the "took-this-janitors-jo... numbers than the BLS U6 number does.

Oct 05 02:47 AM

[Homer II:]

Clive, I think your 17% number is too low. I prefer the SGS number at 22% because it accounts for more of the "still unemployed but discouraged from looking" and the "took this janitors job til something better comes along" numbers than the BLS U6 number does.

HEY S/A: quit editing my posts! Just post what I write or else FVCK OFF.

Oct 05 02:50 AM