Saturday, March 6, 2010

The Real Unemployment Rate

The U-3 unemployment rate held steady until last month, remaining officially at 9.7 percent-a point which is of course being spun in the usual ways-like "Wasn't that a close one? We thought it'd be worse!" or "We've stabilized, which means we can only go up from here!"

Less noted was the fact that the broader U-6 rate, after seasonal adjustment, actually saw a slight uptick-from 16.5 to 16.8 percent.

It may be that the Census (which will see the hiring of a half million workers) will trim the numbers slightly in the next few months, but this is a short-lived blip, while observers continue to wait for signs of real strength in critical sectors. Construction suffered last month, still shedding plenty of jobs-64,000 is the figure I'm seeing-but economists chalk that up to the unusually rough winter weather. (Given the trend over the last year, however, I'm not sure how much difference it made.) Manufacturing has seen some hiring, but the car industry clearly saw job losses-10,000 in February after the uptick of the previous month, and John Schmid of the Milwaukee-Wisconsin Journal-Sentinel is right to refer to the sector's "erratic fluctuations," of which this may simply be one.

Even the relatively upbeat report from Business Week does not question the widespread expectation of a slow labor market recovery-a pessimism that affects not only the officially unemployed, but the underemployed as well, according to Gallup tracking polls from January. Notably, the pessimism is far stronger among those with postgraduate degrees than those who just have "some college or vocational school," with sixty-five percent in the former category giving the "not optimistic" answer, compared to forty-two percent in the latter. (Those looking for broader coverage of those confronting such downward mobility can check out Peter S. Goodman's four-pager in the New York Times last month.)

That the matter of employment is still being discussed as something apart and different from the broader issue of an economic recovery, the "conventional wisdom" from before "the Great Recession" still going strong.

Freefall: America, Free Markets and the Sinking of the World Economy, by Joseph Stiglitz
The General Theory of Employment, Interest and Money by John Maynard Keynes
The Real Unemployment Rate
Of "Geek Shortages"-and "Geek" Dissent
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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