From an email to me:

July 8, 2009 @ 2233Z

As you dig through the info below, consider doing what most insiders do, pay a lot more attention to the info labeled “Household Survey”.  It tends to be regarded by Wall Street insiders as a more accurate picture of what is really happening.  But it too understates the real numbers.

Don’t let your eyes glaze over when you see the tables of numbers.  I know that you can pick your way through them.  With a simple calculator, a basic understanding of arithmetic, and a few pointy questions, you can give yourself a real headache!

Here are the links:  

This one will take you to what I call the over-view page.  Just a bit of light reading,.. for accountants types.  
http://www.bls.gov/news.release/empsit.nr0.htm


Here’s a nice catchy little paragraph that the main-stream media loves to skip over,.. EACH AND EVERY MONTH,.. I wonder why?  Also keep in mind that the “official unemployment rate”, as reported to the media each month, is what is called the “U3 Rate”.  The “U6 Rate” is the governments “no kidding – real best guess” at how many people really are unemployed!

Yes, Dorothy,.. Uncle Sam quietly produces real numbers each month (well,.. almost real numbers),.. but they don’t like to share them with the unwashed masses.  Our little minds are too simple to understand such complicated ciphering.   Just in case you’re wondering,.. historically, U6 tends to run at about U3 times 2!  But strangely enough, the multiplier has been shrinking over the past few years.  Now the multiplier is running at around 1.8 times U3.  Puzzling how that happened.  Government cover-up, you ask?  Intentional under-reporting of “bad news statistics”, no way, not Uncle Sam,.. strike that,.. now read -- Uncle Obama! So that means that if U3 is 9.5%, U6 is running at just a bit over 19%. Let your mind chew on that for a while.  Did you know that the U6 rate in the Great Depression was around 25% (depending on the year)?  How far do we have to go this time?

Unemployment (Household Survey Data)

  "The number of unemployed persons (14.7 million) and the unemployment rate (9.5 percent) were little changed in June.  Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.2 million, and the unemployment rate has risen by 4.6 percentage points."

This page answers some questions about how the government compiles the monthly numbers.  If you read the whole page,.. you’ll see that they talk about people looking for work but finding none are “discouraged workers”, and that are NOT counted in the official unemployment rate!  Only people drawing an unemployment check are counted in the official unemployment rate!  As soon as you have cashed your last check, usually 26 weeks later, you don’t count in the official unemployment rate!

http://www.bls.gov/cps/cps_htgm.htm

Want to see the official U6 numbers, flawed as they may be?  Here you go.  Now pay very close attention, if you do the math in column #1, (June 2008) you will find that the U3 multiplier is 1.8,….. but as you move towards column #9 (June 2009), the multiplier drops down to 1.73, interesting observation.  Has the population significantly changed in the last year?  Maybe we have FEWER discouraged workers today?  Yes that must be it! (NOT!)
http://www.bls.gov/news.release/empsit.t15.htm

Edited by Webmaster on Mar. 05 2010, 10:45

Looks like CNBC is catching on too:

http://www.cnbc.com/id/34040009

The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
Published: Thursday, 19 Nov 2009 | 4:55 PM ET
Text Size
By: Jeff Cox
CNBC.com

As experts debate the potential speed of the US recovery, one figure looms large but is often overlooked: nearly 1 in 5 Americans is either out of work or under-employed.

Unemployment

According to the government's broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labor statistic in 1994.

The number dwarfs the statistic most people pay attention to—the U-3 rate—which most recently showed unemployment at 10.2 percent for October, the highest it has been since June 1983.

The difference is that what is traditionally referred to as the "unemployment rate" only measures those out of work who are still looking for jobs. Discouraged workers who have quit trying to find a job, as well as those working part-time but looking for full-time work or who are otherwise underemployed, count in the U-6 rate.

With such a large portion of Americans experiencing employment struggles, economists worry that an extended period of slow or flat growth lies ahead.

"To me there's no easy solution here," says Michael Pento, chief economist at Delta Global Advisors. "Unless you create another bubble in which the economy can create jobs, then you're not going to have growth. That's the sad truth."



Jeff Cox
Staff Writer
CNBC.com

Pento warns that forecasts of a double-dip ("W") or a straight up ("V") recovery both could be too optimistic given the jobs situation.

Instead, he believes the economy could flatline (or "L") for an extended period as small businesses struggle to grow and consequently rehire the workers that have been furloughed as the U-3 unemployment rate has doubled since March 2008.

As that trend has happened, the U-6 rate has expanded at an even more dramatic pace. Economists cite several reasons for the phenomenon.

For one, more workers are becoming discouraged as real estate—the focal point for the expansion in the earlier part of the decade—has collapsed and taken millions of directly related and ancillary jobs with it.

Winterizing Your Portfolio - A CNBC Special Report

Many workers believe those jobs aren't coming back, and have thus quit looking and added themselves to the broader unemployment count.

"In the earlier part of this decade, 40 percent of all new jobs created were in real estate. Attorneys, mortgage brokers, agents, construction—they were all circled around housing," Pento says. "We've had a jobless recovery in the last two recessions. This is going to be the third jobless recovery in a row."

Another factor that may be leading people onto the rolls of those no longer looking for jobs is the government's accommodative extensions of jobless benefits.

"Workers are unemployed for a much longer span than we've seen historically," says David Resler, chief economist at Nomura Securities International in New York. "Part of that may be affected by the longer availability of benefits. It reduces the incentives for an urgent job search."

The U-6 rate debuted in January of 1994 at 11.8 percent, while the U-3 was at 6.6 percent. The measure hit a low of 6.9 percent in April 2000 while U-3 sat at 3.8 percent.

While the current methodology only dates back 15 years, a former U-6 gauge was in existence previously and peaked at 14.3 percent in 1982. Economists predict the current measure would fall just below that number using the same methodology.

"We're in the process of discovering how severe this recession and the long-run impact on certain industries will be and what that will do to overall employment," Resler says. The U-6 rate "portends a very slow, sluggish recovery."

If that holds and the US economy stays weak, that presents challenges for investors.

"People focus too much on that 10 percent number and not on the larger number," says Kevin Mahn, chief investment officer at Hennion & Walsh in Parsippany, N.J. "There's a humongous inventory of people out there looking for work and have been looking for work for a long time. Where are those jobs going to come from?"

RELATED LINKS

Current DateTime: 01:06:04 27 Nov 2009
LinksList Documentid: 34041738

   * The Worst Jobs in America
   * Recovery or Not? Pros Disagree
   * 'Jobs Saved' Count to Change
   * Avoiding Job Search Burnout
   * Jobless Recovery Game Plan

High unemployment and the resulting pressure on consumers is driving many investors to look for opportunities overseas and in other assets.

Walsh says that trend is going to continue, with clients going to foreign markets, real estate investment trusts, certain bonds—anywhere that can offer profits above the slow-growth mire of US-based investments.

"If full employment is 4 percent, people are wondering how we're going to get from 10 (percent) to 4. Well, try getting from 17 to 4. We may not get back to full employment for a decade," Mahn says. "As an investor, that causes me to look for different places now. Maybe you can't just put money in US large caps and ride out this recovery."

Edited by Webmaster on Nov. 27 2009, 08:40