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The U6 – The scary side of the unemployment numbers

By J.J. Jackson
web posted October 15, 2012

Happy days are here again!  After four years of trying, unemployment finally dropped below the rate considered to spell doom for President Obama.  That rate would be 8%.  There were orgasms of joy when it was announced that the unemployment rate for September was a mere 7.8%.  Forget the fact that President Obama promised that his "stimulus" plan would prevent unemployment from exceeding 8% and that we have been above that number for years.

Of course, what is being reported is the U-3 number [1].  Dubbed the "Official Unemployment Rate", the U-3 is defined as "Total unemployed, as a percent of the civilian labor force."  Of course, as everyone knows, the "civilian labor force" has been shrinking.  In fact, despite steady population increases, the percentage of the population considered to be the labor force has hit some pretty stunning lows.  In September it hit just 63.6% [2].  For comparison, when President Obama took office the rate was 65.7%.

It doesn't take a rocket surgeon to understand that this translates to a lower "Official Unemployment Rate."  Basically, people becoming discouraged and who have stopped looking for work, despite wanting to work, are left out of the "official" unemployment number.

Things look significantly worse when one includes these poor souls shut out of the labor market.  The number known as the U-6 however does count them.  The U-6 is, "Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."  I know it sounds redundant, but hey, that's the Department of Labor's Bureau of Labor Statistics definition.  And being a bureaucracy, what do you expect?

Know what the U-6 rate was for September?  It was 14.7%.

It was also 14.7% in August.  It was 14.8% in May.  In all, for 2012, the U-6 has fluttered between 14.5% and 15.1% and has barely moved [3].  In January 2009, when President Obama ascended to on high, the rate was 14.2%

So, that means that there is a difference between the "Official Unemployment Rate" and what is the real unemployment rate of 6.9% for the month of September.

Now, I know what you are thinking.  What was the difference under EVIL George Bush and VILE Republicans?  Well, let's look.  While Bush was President and Republicans held Congress (January 2001 through December 2006), The U-6 peaked at 10.4% (September 2003).  That same month, the U-3 number was 6.1% [4].  The difference was 4.3%.  That was the largest spread for that period of time.  Most of the time it was in the mid to upper three percent range.

So, not only are the U-3 and U-6 numbers through the roof, but the spread between them has drastically increased by 50%.

Is America better off than four years ago?  Heck, even six years ago when the Democrats seized control of Congress and essentially shut down any effort to stave off the housing market crash of 2008?

The numbers don't lie.  We're not better off. ESR


[1] http://www.bls.gov/news.release/empsit.t15.htm
[2] http://data.bls.gov/timeseries/LNS11300000/
[3] http://portalseven.com/employment/unemployment_rate_u6.jsp
[4] http://portalseven.com/employment/unemployment_rate.jsp

J. Jackson is a libertarian conservative author from Pittsburgh, PA who has been writing and promoting individual liberty since 1993 and is President of Land of the Free Studios, Inc. He is the Pittsburgh Conservative Examiner for Examiner.com.  He is also the owner of The Right Things - Conservative T-shirts & Gifts. His weekly commentary along with exclusives not available anywhere else can be found at http://www.libertyreborn.com.







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