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Initial thoughts on the BLS unemployment data

The Bureau of Labor and Statistics have released the latest unemployment data this morning. In order to determine how the magnitude of the seasonal adjustments I've looked at both Table A-13.Employed and unemployed persons by occupation, not seasonally adjusted, and Employment Situation Summary Table A. Household data, seasonally adjusted.

Seasonally adjusted the unemployment rate is 9.7% compared with 7.7% in January 2009. Non seasonally adjusted the unemployment rate is 10.6% compared with 8.5% in January 2009. It appears that the January seasonal adjusting adds approximately two million to the numbers employed and deducts approximately one million from the number unemployed. While I understand the need for seasonal adjusting to get a handle on overall trends, the fact remains that those who are seasonally adjusted away still claim unemployment insurance, still reduce their consumption, and still potentially move closer to defaulting on mortgages. They are real people.

Table A15 shows the U6 unemployment number: unemployed plus under employed. Non seasonally adjusted this number has now risen to 18% compared to a seasonally adjusted 16.5%.

The number of people not in the labor force was little changed from December 09 to January but 3 million people have been defined as being no longer in the labor force since January 2009. This represents another 2% that could potentially re-enter the workforce should economic conditions improve. When you add that 2% to 7.4% underemployed it looks like a long road back to low unemployment.

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