CNNMoney reports today that the unemployment figure of 9.4% is higher than expected, but it not a accurate representation of how many folks are really out of work or are “underemployed”. I was aware that unemployment figures can only based on how many people are claiming benefits and is always understated for various reasons, but I had no idea by how much.
Pretty scary stuff
And when you add up U-3 and all the underutilized workers the official U-6 rate for May 2009 is 16.4%. That’s an official BLS-generated stat that no one really wants to talk about: One out of every six members of the civilian labor force is either out of work or not fully employed. (And that doesn’t even account for the rising ranks of workers coping with furloughs.)
Okay, so exactly how bad is that from a historical perspective? Pretty bad. The BLS began reporting U-6 in 1994; in January 1994 the U-6 rate was 11.8% and then steadily declined before reaching an all-time low in October 2000 of 6.8%. During the ensuing recession/bear market U-6 peaked at 10.4% (Sept 2003) until the credit crisis took hold in 2008. The U-6 rate hit 10.9% in August 2009 and has been on a rapid climb ever since; over the past year it has shot from 9.8% to today’s 16.4%. It sure makes it hard to buy into the green shoots theory just yet.
Note: There must be a typo in there because by my calendar August 2009 has not happened yet, or has congress intervened in that too ?