Scary title huh? The "official" unemployment rate has risen to 7.2% on a reported loss of another 524,000 jobs in December (remember, this is done through a survey). However, the much more inclusive U-6 rate (which includes discouraged workers and those with part-time who want full time) jumped to 13.5% (from 12.6%).
BLS alternative measures of unemployment
The large jump in the U-6 rate is very troubling, as it shows that labor utilization is falling dramatically and that the recession is going to be a long one (as measured through unemployment), as those jumps in U-6 eventually have to be reconciled in the U-3 rate when the economy recovers (in order to actually get employment back to reasonable levels). This huge jump in U-6 is portraying two things:
- that the official unemployment rate is going to continue to rise in the coming months, and more importantly,
- that it is going to be a long time before the official rate falls below 7% again, as all those discouraged/part-time workers are going to be looking for full-time employment at any hint of a recovery.
Hope everyone has a nice weekend and a job.
Update as requested by Poyster:
U-3 is the unemployment number reported by the media. It does not include discouraged workers (those who stopped looking) and it counts people who are employed part-time but want full-time work as employed (among other things). What is included in each variation of unemployment is included in the link above.
Update #2:
Thanks for the recommendations. First time on the recommended list.