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The May 2009, unemployment numbers for the U.S. were released on Friday, and the offical unemployment rate increased to 9.4%.  However, the offical unemployment rate does not tell the complete story.  The above chart compares the offical unemployment rate, the BLS’ U-6 rate, and what I call the suffering rate.  Each one of these measures unemployment differently.  Let me explain.

First, the offical unemployment rate should be thought of as a baseline.  Then there is the U-6 rate which is the BLS’ broadest offical measure of unemployment.  It takes the offical unemployment rate and adds to it.  The U-6 rate includes:

1) Those that fall into the offical unemployment rate.

2) Plus all marginally attached workers (BLS defines marginally attached as: persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past).

3) Plus those employed part time for economic reasons.

The U-6 is then measured as a percent of the civilian labor force plus all marginally attached workers.  The U-6 is a broad measure of unemployment, but misses some of the people.  For example, individuals that want a job but have not looked for work in the recent past (last 12 months) are not included.  However, the suffering rate does include these individuals.

The suffering rate includes:

1)  Those that fall into the offical unemployment rate.

2)  Plus all individuals that the BLS states ”want a job” (even if they have not looked for work in the recent past).

3)  Plus those employed part time for economic reasons.

The suffering rate is then measured as a percent of the civilian labor force plus all workers that want a job.

To get a clear picture of the unemployment situation in the U.S. you need to look past the offical unemployment rate of 9.4%.  You even need to look past the BLS’ U-6 measure of unemployment that stands at 16.4%.  I think the suffering rate of 18.3% is the broadest (and best) measure of U.S. unemployment (under-empolyment).

Data Source:

Bureau of Labor Statistics

Tables A-1, A-7, A-12, and The Employment Situation, May 2009.

All numbers are seasonally adjusted.

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The April 2009, unemployment numbers for the U.S. were released this morning, and the offical unemployment rate increased to 8.9%.  However, the offical unemployment rate does not tell the complete story.  The above chart compares the offical unemployment rate, the BLS’ U-6 rate, and what I call the suffering rate.  Each one of these measures unemployment differently.  Let me explain.

First, the offical unemployment rate should be thought of as a baseline.  Then there is the U-6 rate which is the BLS’ broadest offical measure of unemployment.  It takes the offical unemployment rate and adds to it.  The U-6 rate includes:

1) Those that fall into the offical unemployment rate.

2) Plus all marginally attached workers (BLS defines marginally attached as: persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past).

3) Plus those employed part time for economic reasons.

The U-6 is then measured as a percent of the civilian labor force plus all marginally attached workers.  The U-6 is a broad measure of unemployment, but misses some of the people.  For example, individuals that want a job but have not looked for work in the recent past (last 12 months) are not included.  However, the suffering rate does include these individuals.

The suffering rate includes:

1)  Those that fall into the offical unemployment rate.

2)  Plus all individuals that the BLS states ”want a job” (even if they have not looked for work in the recent past).

3)  Plus those employed part time for economic reasons.

The suffering rate is then measured as a percent of the civilian labor force plus all workers that want a job.

To get a clear picture of the unemployment situation in the U.S. you need to look past the offical unemployment rate of 8.9%.  You even need to look past the BLS’ U-6 measure of unemployment that stands at 15.8%.  I think the suffering rate of 17.8% is the broadest (and best) measure of U.S. unemployment (under-empolyment).

A few other points about the April 2009, employment numbers:

1)  Nonfarm payroll employment declined by 539,000 jobs which was better than expected.  However, much of the improvement was due to government hiring.  Employment in the private sector fell by 611,000 jobs.

2)  Job losses in February and March were worse than previously reported.  February job losses were revised to 681,000 from 651,000.  March job losses were revised to 699,000 from 663,000.

3)  The number of individuals unemployed for 27 weeks or more (long-term unemployed) increased by 498,000 to 3.7 million last month.

Data Source:

Bureau of Labor Statistics

Tables A-1, A-7, A-12, and The Employment Situation, April 2009.

All numbers are seasonally adjusted.

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