On The Margin: Total Unemployment October 2013

 |  Includes: DIA, QQQ, SPY
by: Sold At The Top

The latest Employment Situation report showed that in October Total Unemployment, including all marginally attached workers, increased to 13.8% while the traditionally reported unemployment rate inched up to 7.3%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of unemployed (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively on the margin; either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers marginally attached workers (including discouraged workers) and persons who have settled for part time employment to be underutilized labor. The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.