I am sure that this will not be everyone’s favorite topic, but with all the false information fed to us by the news media, I feel some kind of explanation is necessary to sort through the chaff.
First, let us start with an explanation of the various “stages” of unemployment. This information was garnered from Wikipedia.
Definitions of Unemployment Categories
The Bureau of Labor Statistics also calculates six alternate measures of unemployment, U1 through U6, that measure different aspects of unemployment:
- U1: Percentage of labor force unemployed 15 weeks or longer.
- U2: Percentage of labor force who lost jobs or completed temporary work.
- U3: Official unemployment rate per the International Labour Organization definition occurs when people are without jobs and they have actively looked for work within the past four weeks.
- U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
- U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
- U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons (underemployment).
Note: "Marginally attached workers" are added to the total labor force for unemployment rate calculation for U4, U5, and U6. The BLS revised the CPS in 1994 and among the changes the measure representing the official unemployment rate was renamed U3 instead of U5.
In the above, the U3 category is the category measured when they report the rate of unemployment. In fairness, this is the category used during all presidential administrations. When unemployment numbers in the U3 category are low, it is usually because of good economic times and the U4, U5, and U6 categories generally are low as well.
Keep in mind that since the government and the media report the U3 category, they are actually ignoring the “true” unemployment rate because the U3 is only reporting those that have filed for unemployment benefits and have been looking for the last 4 weeks. It ignores all of those discouraged workers, marginally attached workers and part time workers.
Thus, when the administration recently announced that unemployment was down to 8.5% it is a false accounting of the actual number of people who are unemployed or under-employed. Politically speaking, the Obama administration would like to point to 8.5% as a good number, the actual number of people in categories U3, U4, U5, and U6 are probably closer to about any number between 11% and 17%, depending on which categories one wants to cite.
Also, the recent number of 8.5% does not factor in the number of those that were seasonally employed for the Christmas shopping season. I fully expect the U3 number to increase soon once those seasonal employees once again apply for unemployment, if they are even allowed to apply.
Below are a number of link quotes from news stories and links to the full stories:
“The U.S. unemployment rate unexpectedly fell to 8.5 percent last month as job creation was more robust than expected, providing continued signs that the nation's labor market is improving gradually.
Growth in manufacturing jobs helped offset a loss in government positions, while wages edged higher and the length of the work week also lengthened a bit.
The unemployment rate — a hotly contested number because of the rise in potential workers who have quit looking for jobs — has fallen 0.6 percentage points since August.
However, an alternative measure of unemployment that counts discouraged workers also dropped sharply. The so-called U-6 number, more encompassing than the headline number the government publicizes, dropped to 15.2 percent from 15.6 percent in November.”
While this story relates that 200,000 new jobs were created, it actually takes about 170,000 new jobs every month to keep up with the expanding population wanting to work.
“Enamored with the 200,000 number? Don't be - the reason why the market has basically yawned at this BLS data is that as Morgan Stanley's David Greenlaw reports, 42,000 of the 200,000 is basically a seasonal quirk, which will be given back next month, meaning the true adjusted number is 158,000, essentially right on top of the expectation.”
Add these to the problems and consider the doctors and their employees being out of work.
Doctors Going Broke
January 6, 2012
NEW YORK (CNNMoney) -- Doctors in America are harboring an embarrassing secret: Many of them are going broke.
Oh, and factor this in, which could be an entirely different blog post all by itself:
Then there is this bit of news, which will help add to the unemployment over the coming decade. The President’s plans for the military will reduce their numbers by 500,000, adding further to the unemployment figures.
The US Can No Longer Fight the World’s Battles
President plans to cut half a million troops and says US can't afford to wage two wars at once
Friday, 6 January 2012
The Independent (co.uk)
The mighty American military machine that has for so long secured the country's status as the world's only superpower will have to be drastically reduced, Barack Obama warned yesterday as he set out a radical but more modest new set of priorities for the Pentagon over the next decade.
With the current level of military, the U.S. can be engaged in two wars at the same time. President Obama’s plan will reduce us to only being able to be engaged in one. God help us if two or more nations that “might” dislike us decide to attack us.
Now, with tongue in cheek, are there really ANY countries out there that would like to see the U.S. destroyed? I can name more than that with just those in the Middle East.