Friday, December 4, 2009

The Real Unemployment Rate

The official, U-3, unemployment rate has edged down from 10.2 percent in October, to 10 percent in November, according to today's report from the Bureau of Labor Statistics.

Additionally, the U-6 rate went down by an even larger margin, from 17.5 percent in the last report, to 17.2 percent in this one.

However, a quick check shows that the number of long-term unemployed actually climbed, from 5.7 percent in October to 5.9 percent in November. The improvement, as Kurt Brouwers of Marketwatch suggests, may simply be "a statistical change rather than a real improvement" due to a number of frustrated job-seekers giving up the hunt.

In other words, the fact that people give up looking for work because the situation is so awful ends up, perversely, looking like a sign of improvement.

It also seems that, as suggests, the "drop in payrolls was entirely driven by goods-producing firms shedding jobs. Goods-producing companies lost 69,000 jobs in November." Read: manufacturing and construction. This is also bad news rarely commented upon, fashionable as it may be to slight actual goods production as trivial.

As always, the details count.

The Real Unemployment Rate
"Unemployment Problems Are Worse Than Meet the Eye"
The Real Unemployment Rate
Second Quarter Growth, 2009
The Real Unemployment Rate-And What It Means
Economic Update (OECD, Joshua Holland, Tim Hanson)
Global Finance Development 2009
More On The Economic Crisis (Eichengreen and O'Rourke on Industrial Output, Wolf on Eichengreen and O'Rourke, Austerity?)
Is the U.S. the New France?
The Human Cost of the Economic Crisis
The Real Unemployment Rate-And What It Means
On Consumer Spending
On the Global Economic Mess

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