Subscribing to Dean Baker‘s skepticism about the media’s reliability in reporting economics, I was surprised to find a brief, clear explanation on the new unemployment numbers in the Wall Street Journal. All of the major outlets are focusing on the 10.2 percent just released by the Labor Department. However, this figure, known as the U-3, includes those who have sought work in the past four weeks. But, it excludes discouraged workers, part-timers who want full-time word, and marginally attached workers. The U-6 adds these folks to the U-3 for a fuller picture of unemployment.
WSJ Real Time Economics blog, “Broader U-6 Unemployment Rate Hits 17.5%”
The U.S. jobless rate jumped up 0.4 percentage point to 10.2% in October, the highest level since April 1983. The government’s broader measure of unemployment shot up even more, rising half a point to 17.5%.
The comprehensive gauge of labor underutilization, known as the “U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can’t find full-time jobs. Its continuing divergence from the official rate (the “U-3″ unemployment measure) indicates the job market has a long way to go before growth in the economy translates into relief for workers.
This makes sense if we pause and consider what the unmployment numbers should be telling us – how many people can’t find work to support themselves and their families. Of course, this doesn’t even breach the subject of the exploding ranks of the working poor, those who are working at least full-time but are still struggling and not necessarily succeeding, in making ends meet.
The travesty of unemployment numbers, in any case, deserves broader attention and scrutiny.
- One of my favorite recent pieces on the subject was published by Kevin Phillips last year in Harper’s, and traces the decline in reliability of labor and other official national economic statistics.