USA "Real" Unemployment Rate still stubbornly high @ 15.9% in Feb, down from the 17.4% 2009 high
June 4 2011 delayed FreeVenue public release of March 4th guidance @ our MemberVenue ~ Today's headline USA Unemployment Rate for January may be 8.9% (U-3), but the dire state of the jobless recovery is better reflected by the REAL Unemployment Rate of 15.9%. The latter includes discouraged/marginally attached workers and economically necessitated part-timers. The rate is down from 16.1% in January but is not much lower than the Recession inspired high of 17.4% set October 2009.
The post WWII high for this Bureau of Labour metric (U-6) was 19.3% in Nov/Dec 1982. The all time record of 25.6% was set in 1933. By 1937 it had corrected to 11%, but in a 1938 premature effort to balance the Budget, suffered a relapse to 20.0%.
This jobless recovery was foretold by TrendLines Research in Autumn 2008. And it seemed the economy was over the hump when it was reported the Inventory/Sales ratio was much improved. As some sectors move to replenish, there is a visible increase in Aggregate Weekly Hours ... then overtime ... and finally re-hiring. The U-6 Unemployment Rate did not peak 'til 23 months after the trough of the 2001 Recession. It never did get back to the pre-contraction level of 6.8%. With the recent Recession ending June 2009, then U-6 topped out four months after the trough "this time".
But just as it was thought the fiscal stimulus was ushering in a robust Recovery, our December 2009 Trendlines Recession Indicator began to hint of relapse ... perhaps one to three years off. By February 2010, the "downturn" was starting to look more like a double-dip. And by March, it became apparent whatever was on the horizon wasn't a year off any longer. In July it appeared the economy's growth rate could be negative within several weeks, but intervention by Congress & the Fed have thwarted the dreaded double -dip.
The only factor standing in the way of a full Recovery is the will of the USA Gov't to address its Structural Deficits and mounting National Debt. Failure to deal with this fiscal mismanagement may lead to another financial crisis, founded on a devalued Dollar, subsequent higher petroleum prices and a re-visit to Recession. The Trendlines Recession Indicator & Debt Meter provide guidance on the economy's history and path forward.
On resumption of the business cycle, folks commence to come back into the labour market, and the statistical U-3 universe expands. Due to the larger denominator, it is common for the U-3 rate to rise temporarily, masking the better times. With that paradox, the Real Unemployment Rate (U-6) may actually start to decline first and hence reveal the early signs of an improved employment environment.