Actual Unemployment Rate Hits All-Time High of 16.8%
As regular readers of The Ticker know, we like to hammer on the official U.S. unemployment rate versus the unofficial rate, which we believe to be a truer picture of joblessness in this country.
This morning, the Labor Department said the official number climbed from 9.4 percent in July to 9.7 percent in August.
But the unofficial number jumped from 16.3 percent to 16.8 percent.
The difference between the two rates is due to who's counted among the unemployed.
The official number is arrived at by combining a rotating monthly survey of 60,000 U.S. households performed by the Labor Department's Bureau of Labor Statistics with jobs data sent in by employers. According to this measure, you are marked as "unemployed" if you're jobless and you meet certain criteria, including whether you looked for work in the previous four weeks.
The unofficial number starts with the official rate and then adds in everyone else who should be working full time but is not, including those whose hours have been reduced from full time to part time, those who have become so discouraged they have given up looking for work and others who are "marginally attached to the labor force." Many economists believe this rate is a truer measure of the health of the economy.
Last month, we did some numbers-crunching and found that unemployed Americans are so discouraged about the prospect of finding a new job that they're checking out of the labor force at the highest and fastest rate in nearly 10 years. Further, the recession has forced more full-time workers into part-time slots than at any time over the past 15 years.
You can read our entire analysis by clicking here.
We know that unemployment has continued to rise for several months after past U.S. recessions have ended. Many economists and even the White House have said (hoped?) that the official number will top out around 10 percent. But even if that's the case, you should not expect it to suddenly start dropping back down as soon as it peaks. Good guesses say it could be a matter of years before the official unemployment rate gets back down to a figure we're more used to seeing, something in the 5 percent range.
As for the unofficially employed -- now numbering nearly twice the officially unemployed -- the wait could be longer.
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