Few people are familiar with the U-6 report that is issued by the United States Department of Labor-- Bureau of Labor Statistics. The U-6 (Table A-12:Alternative measures of labor under utilization) measures the real rate of unemployment in the United States.
Most news organizations report the more popular U.S. Department of Labor: Civilian Unemployment Rate. If you read the report today you learned that unemployment is 9.5 percent for June.
If you read the U-6 you learned the real rate of unemployment is 16.8 percent versus 10.3 percent in June 2008.
Real Unemployment U-6 — 16.8%
There are other groups of unemployed that are not counted in the more popular employment report. The Bureau of Labor Statistics U-6 report includes the unemployed and those that have thrown in the towel.
The U-6 report includes:
- Total unemployed
- plus all marginally attached workers
- plus total employed part time for economic reasons
- as a percent of the civilian labor force plus all marginally attached workers
In other words,
- Marginally attached workers are persons who currently are neither working nor looking for work, but indicate that they want and are available for a job and have looked for work sometime in the recent past.
- Discouraged workers, a subset of the marginally attached,have given a job-market related reason for not looking currently for a job.
The U-6 report counts everyone that is unemployed--officially and unofficially.
Here are some other statistics that you might find disconcerting.
- About 2.2 million persons (not seasonally adjusted) were marginally attached to the labor force in June. 618,000 more than a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the past 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
- Among the marginally attached, there were 793,000 discouraged workers in June, up by 373,000 from a year earlier.
- In June, the average workweek for production and nonsupervisory workers on private nonfarm payrolls fell by 0.1 hour to 33.0 hours — the lowest level on record for the series, which began in 1964.
- The number of long-term unemployed (those jobless for 27 weeks or more) increased by 433,000 over the month to 4.4 million.
- In June, 3 in 10 unemployed persons were jobless for 27 weeks or more.
This morning the stock market is reacting negatively to this report. If you are wondering why, all you need to do is look beyond the obvious.