Total Unemployment Continuing Its Ascent

Jul. 02, 2009 1:57 PM ET1 Comment
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Sold At The Top
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Today’s Employment Situation report showed that in June “total unemployment” continued its ascent and now stands at 16.5% of the civilian population or 38.88 million people.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit qualification 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.

Below is a chart (click for larger version) showing the “total” unemployment rate versus the “traditional” unemployment rate along with the year-over-year percent change to the “total” unemployment rate.

Notice that the “total” unemployment rate has been skyrocketing as of late, showing a 63.37% year-over-year increase and reaching the highest level seen since the government began tracking the many measures of marginalized workers while the spread between the “traditional” and “total” unemployment rates stands at 7%.

The chart below (click for larger) calculates the spread between the “total” unemployment rate and the “traditional” unemployment rate.

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Sold At The Top profile picture
15.74K Followers
“Sold At TheTop” is the snarky pseudonym for the organic blogger that maintains the reasonably popular blog PaperEconomy (www.papereconomy.com). “Sold”, as he prefers to be called is not a professional economist, analyst or stock trader and has neither been trained in finance nor statistics. What Sold offers is a dedicated and serious passion for macroeconomic analysis and further, for the creation of striking, some say even artistic, visualizations of macroeconomic data. Though not a “perma-bear” Sold is very bearish about the current state and future of the American economy. Sold is NOT A PESSIMIST by nature but a true skeptic and a realist that prefers solid and sustained evidence of fundamental economic recovery to “Goldilocks”, “Green Shoots”, “Mustard Seeds” and wholesale speculation. Further, Sold believes that the evidence for rational and efficient markets as well as collective wisdom is scant. In his spare time Sold works as an independent software consultant spewing out cutting edge code like he’s spraying silly string.

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