The unemployment picture painted by media headlines is much rosier than reality. The latest unemployment numbers according to media reports “surprisingly fell to a five-month low of 9.7 percent.”
Yet, the Dow broke below 10,000 for the first time in months. The real unemployment number reported by the Bureau of Labor Statistics (BLS) is much higher and scarier than they want you to believe. What’s next?
The BLS publishes different sets of data on a regular basis. The main focus tends to be on the U-3 unemployment rate (currently 9.7 percent, seasonally adjusted).
U-3 is the “official” unemployment rate and illustrates total unemployed persons as a percentage of the civilian labor force.
U-4 is another category that includes unemployed workers plus discouraged workers. A discouraged worker is someone who’s available to work but has stopped actively seeking for work.
U-5 unemployment includes the number of unemployed workers, plus discouraged workers, plus marginally attached workers. A marginally attached worker is someone who is able and willing to work but is not actively seeking work.
U-6 is as close to the real unemployment figure as government reporting gets. This number includes unemployed workers, plus discouraged workers, plus marginally attached workers, plus workers that are forced to work part-time because they are not able to find a full-time job. Put another way, it’s the most realistic picture of today’s job market as any.
According to the Bureau of Labor Statistics, the number of U-6 unemployed workers is 18 percent (not seasonally adjusted – 16.5 percent). This is the highest number of record.
Keep in mind that neither of the above categories encompasses another important element of the labor force; unemployed self-employed” workers. If you’re a handyman or contractor next door, or a small business owner who can’t secure work, you are not included! Adding these folks to the mix would put the real unemployment number above 20 percent!