U-6 Unemployment Rate Creeps Higher in December
The unemployment numbers for December were released earlier today, and most investors ended up yawning at the news.
The official unemployment rate for December (10.0%) was unchanged from November, as the country lost 85,000 nonfarm payroll jobs.
As mentioned, the news didn't come across as particularly interesting to many investors as the markets lurched through a sleeper of a day. There were rumors that there would be a large positive nonfarm payroll number posted, but this obviously didn't happen.
As always, many people accept the "official" unemployment number from the government (the U-3 rate) and go about their business.
However, there is some pretty interesting information buried within the page of the "Employment Situation Summary" from the Bureau of Labor Statistics.
As mentioned, the "official" unemployment rate in December was 10.0%.
However, the U-6 rate, which is considered to be a broader measure of labor underutilization in the country, edged up to 17.3%.
The U-6 unemployment rate contains three groups of people (actually, two groups as well as a subgroup) that aren't included in the "official" rate. They are:
1. Marginally attached workers (meaning, those who have looked for a job in the past while, want a job but are maybe brushing up on their education or taking some time off in hopes of the labor market picking up)
2. The "discouraged workers", who are those who have given up on finding a job
3. People who are worked to work part-time jobs for "economic reasons" but would like full-time employment. For instance, an out-of-work engineer who has taken a 15 hour a week job at the local grocery store to help pay some of his family's bills.
These three groups of people are NOT included in the official unemployment number.
According to the BLS (Bureau of Labor Statistics), there are currently:
-2.5 million people who are marginally attached to the work force
-929,000 discouraged workers
-9.2 million "involuntary part-time workers" (those who want full-time work but need to settle for part-time jobs.
*note these numbers are not seasonally adjusted
Here is some more sobering data for you:
-6.1 million long-term unemployed in the United States as of December
-4 in 10 unemployed workers were jobless for 27 weeks or longer
-civilian labor force participation rate and employment-population ratios both dropped in December
-15.3 million unemployed people in the United States as of December, up from 7.7 million at the start of the recession
The pace of job losses in the United States is certainly flattening out, however, there are still an unbelievable amount of people that need to be put back to work - even more than the "official" unemployment rate would have you believe.
Filed under: General Market News