The official unemployment rate -- what the Federal Bureau of Labor Statistics calls U-3 -- is now at nine and a half percent, which is as bad as it's been since the end of World War II.
But a more realistic measure of unemployment and under-utilization of labor is the same bureau's U-6 figure, and that is now at 16 and a half percent. During the most intense years of the Great Depression of the 1930's, unemployment nationwide was between 20 and 25 percent, so the U.S. labor market is going to approach those levels before this current unwinding is done.
Unemployment measure U-3 is the total number of unemployed as a percentage of the civilian population. U-6 is "Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force." The BLS explains further that "Marginally attached workers are 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. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule."
The Associated Press reports today that "Recession-weary employers in the U.S. slashed 467,000 jobs in June, the Labor Department reported, far worse than the 363,000 that economists expected and a grim signal that the path to recovery will be bumpy. The jobless rate rose to 9.5 percent from 9.4 percent in May." Another half million out of work, another half a percentage point added to the official unemployment tally.
Where is this "recovery" the print and broadcast media keep talking about. It seems awfully elusive, yet the newspaper pundits and talking heads seem convinced that it's real.
So does President Obama, who said today he's confident the economy will "turn around in the short term" and the nation will "prosper in the long term" despite today's bad unemployment news.
What's obvious to me is that neither Obama nor any of the experts in the media, and very few economists and financial gurus are willing to admit that our way of life is undergoing fundamental changes. The Great Depression II is a actually just a prelude to bigger changes than either Franklin Roosevelt or Barack Obama ever imagined.
2 comments:
Any green shoots lack sustaining soil.
An economy needs production and sales of goods. Internal services provide less support than goods, but are as potent as manufactured goods on an export basis. Returning to the farming metaphor, exportation of goods and services are potent economic nutrients.
Seems our leaders don't want to acknowledge the most elementary equation of all in a consumer-spending-supported economy: no jobs, no money getting spent.
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