U6a Unemployment Climbs to 19.1%



As reported by the Bureau of Labor Statistics this morning (see the above link), U3 unemployment (the measure most widely reported) rose in August to 9.7% from 9.4% in July.  But, as it always does when the economy enters recession, the government plays games with this figure, holding it down in an effort to prop up consumer confidence with the explanation that workers have been dropping out of the labor force. 

My calculation of unemployment  assumes a constant percentage of the population as the size of the labor force.  So, as the population grows, the size of the labor force grows proportionately.  (After all, it’s ridiculous to assume that the new members of the population don’t need a source of income.)  Using this method – what I call “U3a” – the unemployment rate rose in August by 0.3% (in line with the government’s reported rise) to 10.6%.  And U6a, the broader measure that includes discouraged workers and those working part-time when they need to find full-time jobs, rose to 19.1%.  (See the following spreadsheet for my calculation method.)

Unemployment Calculation PDF

As you can see, unemployment actually rose by about 466,000 (a figure you’ll find buried in the BLS report), and not the drop in non-farm jobs of 216,000, the figure that garners all the headlines.  This rise in unemployment is a combination of the decrease in the employment level of 392,000 (see column E) and the increase in the civilian labor force of 73,000 (see column B). 

Unemployment in the city of Detroit (using the government’s figures) has risen to 28.9%.  The city is truly experiencing “Great Depression” conditions. 

It’s entirely within the powers of the President to restore the nation to a condition of full employment by changing failed trade policies to establish a balance of trade in manufactured goods.  But thus far he has failed to act, choosing not to rock the World Trade Organization (WTO) boat and allowing grossly overpopulated nations to prey upon the American market and American jobs to sustain their badly bloated labor f0rces at Americans’ expense.  With global unemloyment at 30%, we can expect unemployment  in the U.S. to continue to rise as long as we participate in the WTO’s global unemployment-sharing scheme.


One Response to U6a Unemployment Climbs to 19.1%

  1. ClydeB says:

    With the pipeline full of goods, there is no hope of turning the situation around without a major change in trade policy.

    With the inherent improvement in productivity that accompanies every reduction in workforce, the companies that survive will not recall all of the laid off workers even if there is an upturn in demand.

    We must keep plugging away at every email box, newspaper and phone number we can.

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