Unemployment Rates, The Real Deal. (statistics, suspect, Missouri, Indiana)

[ovcatto]

Some like to argue that the unemployment hitting 7.6% isn't all that bad since the unemployment rate was 10.8% at the height 1982 recession. Well, think on this;

In 1929 unemployment was 3.3%. A full year after the crash unemployment had only reached 8.9% and it took another year to reach 15.9 but by 1932 unemployment hit a full 23.5 and would climb to 24.9 before the enactment of the National Industrial Recovery Act.

One other piece of the current puzzle to keep in mind is how the Bureau of Labor Statistics calculates unemployment as this article in Financial Week points out:

"Under President Lyndon Johnson, the government decided individuals who had stopped looking for work for more than a year were no longer part of the labor force. This dramatically decreased the jobless rate reported by the government.

“Both part-time workers wanting full-time work and discouraged workers tend to make the unemployment rate lower than it would otherwise be,” says Robert Schenk, professor of economics at St. Joseph’s College, Indiana.

Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem.

By his count, if unemployment were still tallied the way it was in the 1930s, today’s jobless rate would be closer to 16.5%—more than double the stated rate."

Jobless rate now at 16.5%—using Depression-era yardstick - Financial Week

[TuborgP]

Originally Posted by ovcatto

Some like to argue that the unemployment hitting 7.6% isn't all that bad since the unemployment rate was 10.8% at the height 1982 recession. Well, think on this;

In 1929 unemployment was 3.3%. A full year after the crash unemployment had only reached 8.9% and it took another year to reach 15.9 but by 1932 unemployment hit a full 23.5 and would climb to 24.9 before the enactment of the National Industrial Recovery Act.

One other piece of the current puzzle to keep in mind is how the Bureau of Labor Statistics calculates unemployment as this article in Financial Week points out:

"Under President Lyndon Johnson, the government decided individuals who had stopped looking for work for more than a year were no longer part of the labor force. This dramatically decreased the jobless rate reported by the government.

“Both part-time workers wanting full-time work and discouraged workers tend to make the unemployment rate lower than it would otherwise be,” says Robert Schenk, professor of economics at St. Joseph’s College, Indiana.

Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem.

By his count, if unemployment were still tallied the way it was in the 1930s, today’s jobless rate would be closer to 16.5%—more than double the stated rate."

Jobless rate now at 16.5%—using Depression-era yardstick - Financial Week

I understand what you are saying but remember if we are 2/3 of the way to equality with the depression some might conclude that things are not going to be as bad as they were afraid it might be. Many folks and many areas of the country are doing well. The impact is not spread out equally across communities.

[saganista]

Originally Posted by ovcatto

One other piece of the current puzzle to keep in mind is how the Bureau of Labor Statistics calculates unemployment as this article in Financial Week points out:

"Under President Lyndon Johnson, the government decided individuals who had stopped looking for work for more than a year were no longer part of the labor force. This dramatically decreased the jobless rate reported by the government.

“Both part-time workers wanting full-time work and discouraged workers tend to make the unemployment rate lower than it would otherwise be,” says Robert Schenk, professor of economics at St. Joseph’s College, Indiana.

Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem.

By his count, if unemployment were still tallied the way it was in the 1930s, today’s jobless rate would be closer to 16.5%—more than double the stated rate."

Neither John Williams nor shadowstats.com should be taken very seriously. While he is cited often enough in mainline sources, his is a service that caters to moonbats as its bread and butter. When mainline sources cite him, read carefully to see if they are representing that they have verfied and endorsed his work, or whether they present a caveat emptor situation wherein no independent checking into the data has been done and all responsibility for the aptness or inaptness of the numbers is left with the source.

The generality of this particular situation is apt enough. The collection and analysis of unemployment data have improved greatly since the 1920's and 30's. There were no periodic surveys done to look specifically for any types of unemployment until the 1940's. Estimates for earlier times were generated from partial data sets independently existing at various levels of government, and they did not conform to any definition of unemployment that we would necessarily recognize as rigorous today. At the same time, the data were regarded as being rather good at the time, and latter day analysts have not found any good reason to deviate from that assessment. Those data are what they are, but what they are is pretty much pretty good.

As for current data on an an least very similar basis as might have obtained in the 1930's, one doesn't need John Williams at all, since BLS publishes the numbers every month in Alternative Measures Table U-6. The series number is LNS13327709 for any who are familiar with BLS data, but it is basically the rate calculated for unemployed workers plus marginally attached workers (includes discouraged workers) plus those working part-time for economic reasons (i.e., not because they want to). The seasonally adjusted U-6 rate for January 2009 was 13.9%. This compares to a rate of 8.0% to 8.7% that obtained in 2007. The unadjusted rate for January of 2009 was 15.4%, which is an interesting number but not nearly so useful in analysis as the adjusted rate. Anyone can get the latest U-6 numbers whenever they want by going here...

Data Retrieval: Labor Force Statistics (CPS)

Scroll down the page to Table U-6, put a check in the right-hand box (for seasonally adjusted), then click the Retrieve Data button at the bottom of the page. Monthly data are available on-line for the most recent ten years. For data earlier than that, you would need a different source.

[EinsteinsGhost]

Unemployment rate is only a minor measure of economic conditions. GDP is where the reality is. Based on an article I read a few days ago, our long term joblessness was already at 17.5% in January 2008, worse than it was during 2001 recession, but since GDP was still in somewhat positive territory, it didn't make much headline.

[Emeraldmaiden]

If it were not for our home business - which doesn't quite make enough to pay the bills yet - the unemployment rate in my house would be 100%. Of course, we don't count anymore, because we're not receiving unemployment.

[saganista]

Originally Posted by EinsteinsGhost

Unemployment rate is only a minor measure of economic conditions. GDP is where the reality is. Based on an article I read a few days ago, our long term joblessness was already at 17.5% in January 2008, worse than it was during 2001 recession, but since GDP was still in somewhat positive territory, it didn't make much headline.

The long-term unemployment rate -- just to define it -- is the number who have been unemployed for 27 weeks or more divided by the total number unemployed. That rate was at 18.1% in January of 2008. (The number will have been revised in January 2009 for updated population data.) The rate was at 22.4% in January 2009, down from 23.2% in December 2008. The data are published monthly by the BLS in Table A-9, a link to which is found at the bottom of every BLS monthly employment situation press release.

GDP is without a doubt the iconic statistic for overall economic performance. Both its strong point and its weak point is that it includes everything. To get a more detailed picture of the economy, it's a good idea to pay attention to a variety of other measures as well, one of which is unemployment data.

Much of the beat press writing about the economy are actually pretty ignorant of it. The media specialists who analyse such things do tend to be better, but often their viewpoint is their guide, so be sure to filter. The best sources are those who have a deep understanding of the data and are stuck in an absolutley non-partisan position. These folks tend to be in government and in the upper echelons of academia. Just an FYI...

[tcrackly]

While all this debate was going on about the formulaic value of the unemployment statistic, another thousand people became unemployed.

[AONE]

I think by looking for employment they define it as those who collect unemployment benefits... when those funds run out one stops looking officially. I've heard Missouri has run out of money in their unemployment fund due to the high volume. I suspect it is significant;ly above what is reported presently we just choose to turn a blind eye. Visions of Regan clicking his heals saying "say it isn't true" comes to mind...

[saganista]

Originally Posted by AONE

I think by looking for employment they define it as those who collect unemployment benefits... when those funds run out one stops looking officially.

No, receiving or not receiving unemployment benefits has no bearing at all. The actual unemployment data are gathered from monthly household surveys first developed in the 1940's and most recently significantly revised in 1994. At the same time, a survey of some 370,000 establishments is done. This provides a snapshot from both the employer side and the employee/employee-wannabe side. The former is used more for employment data as the latter is used more for unemployment data.

[tcrackly]

Funny, I've never met anyone that participated in any such household survey. In addition I have heard journalist actually qualify that the unemployment stats refer to only those receiving government benefits.