BLS releases a new unemployment report

Last Friday, the Bureau of Labor Statistics released an Employment Situation Summary which shows the unemployment numbers for April 2009.

The official rate of unemployment (labeled U3 by the BLS) is now 8.9%...the highest rate is has been since 1983.

Of course, that is just the "official" unemployment rate. There is another measure the BLS uses: the U6.

What makes the two different? Only the U6 counts "marginally attached workers".

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 "official" unemployment measure doesn't count those who aren't working and have given up looking after becoming discouraged with the lack of job openings. If a person stops actively looking for work for 4 weeks, that person becomes "marginally attached".

You see, if you are continually unable to find a job and finally give up...you aren't unemployed anymore.

You aren't employed. But you aren't unemployed. Government mathematical magic!

This, of course, drastically alters the percentage of unemployed. While the U3 posits a 8.9% unemployment rate, the U6 shows a 15.8% rate. Almost double.

Counting those "marginally attached workers" makes all the difference in the world. As the newly released report notes, there are millions of people who fall in that category.

About 2.1 million persons (not seasonally adjusted) were marginally attached to the labor force in April, 675,000 more than a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

So while some have noted that our unemployment rate is lower than that of the Great Depression...they are using cooked numbers. The Great Depression had a rate at about 15.9%...if we use the more accurate U6 instead of the prettier U3, we find that we are basically right there.

The government uses those numbers to cook the books as it were and make unemployment look less severe than it is in reality. Others are doing their part to belittle the economic woes of many.

Recently, Rush Limbaugh gave a speech in support of the Heritage Foundation which is a conservative think-tank. In that speech, he mocked the recession and bragged about his wealth.

I’ve never had financially a down year. There’s supposedly a recession, but we’ve got - what is this May? Back in February we already had 102% of 2008 overbooked for 2009. So I always believed that if we’re going to have a recession, just don’t participate.

Unlike Rush Limbaugh, 15.8% of the nation doesn't have the option of just not participating.