Tags: News | Unemployment

Friday’s jobs release had several positives: Employers shed fewer jobs. Hourly earnings climbed a tad. The number of hours worked ticked up slightly. And even the unemployment rate itself slid by a tenth of a point. This underscores our view that the U.S. economy could enjoy a feeble recovery for several more months, much like Japan did in response to massive government intervention during its lost decade of the 1990s.

So for anyone who had been hammered to a pulp by prior unemployment disasters, the news was clearly “less bad.” But for anyone who can step back from the trees, the long-term jobs outlook in the U.S. is still dismal:

• A key reason the unemployment rate declined is because so many people gave up looking for work.
• Only 59.4 percent of Americans are working, the least since the early 1980s.
• Among the unemployed, the share of those out of work for six months or more has surged to 34.3 percent, the worst since this number was first tracked 61 years ago.

What is the actual unemployment rate in the United States?

According to the government’s official measure, it’s 9.4 percent.

Unemployment Figures

But even the government admits that, if you include part-time workers seeking full-time jobs plus discouraged workers (those who have given up looking for work), its broader jobless measure (called “U.6?) is now at 16.3 percent.

Moreover, John Williams of Shadow Government Statistics (www.shadowstats.com) reveals that, during the Clinton Administration, the government defined away large numbers of discouraged workers by dropping from its count anyone who stopped looking for more than a year.

Add back in that group, and he estimates the actual unemployment rate in the U.S. is closer to 20.6 percent!

Bottom line: Despite the positives in Friday’s jobs report, the big-picture outlook is still the worst since the Great Depression.

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