Don't Be Fooled About Jobs: No Change in U-6 – “Real” Unemployment Rate is Still 14.7%

Despite the Democrat spin you're hearing, the real unemployment picture for September was no better than in August.

Although the Obama campaign is spinning the new 7.8% September unemployment rate furiously as something positive, there’s nothing to celebrate. 

I can’t explain the statistical calculations that made the official unemployment rate for September drop to 7.8 percent. But I do understand that the number of underemployed Americans, according to the government, actually increased from 23.1 to 23.2 million between August and September.

To arrive at this more meaningful assessment of the current employment situation, I reviewed the Bureau of Labor Statistics’ numbers that include, not only the unemployed, but also the underemployed – people like me who are working less than full time, but not by choice – and those who are “marginally attached” to the workforce. 

“Marginally attached” workers haven’t looked for work in the past four weeks but want jobs.  The sum of unemployed, underemployed and marginally attached workers is often referred to as the U-6 rate (as opposed to the U-3 rate, which reflects only the number of unemployed).  Many think the U-6 rate is a more accurate reflection of the actual impact of the economy on the labor force.

The September numbers of unemployed, underemployed and marginally attached workers, reported Friday, are 12.1 million, 8.6 million and 2.5 million, respectively, for a total of 23.2 million people. These figures equate to an underemployment rate for September of 14.7 percent.

I compared these to the August numbers of unemployed, underemployed and marginally attached workers, which were 12.5 million, 8 million and 2.6 million, respectively, for a total of 23.1 million people. These figures translated to an underemployment rate of 14.7 percent, the same rate as September’s.

Another number of particular interest to me hasn’t changed either. That’s the number of long-term unemployed, defined as those who have been out of work for 27 weeks or more. In August, this number was five million people, or 40 percent of the unemployed. In September, it was 4.8 million, still 40 percent of the total number of people reported as unemployed.

Too pessimistic? OK, just so you don't think I'm one of those glass-is-half-empty people, here’s a positive note on which to conclude: at least the September numbers are no worse than the August ones!

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Dazed not Confused October 09, 2012 at 01:06 AM
Fran, I agree that it's difficult to draw conclusions from one or two months of data, but if there is any group 'spinning' the data, it's the Republicans. I suggest you read this article by someone who knows infinitely more about this than you: http://www.nytimes.com/2012/10/08/opinion/krugman-truth-about-jobs.html?hp&_r=0
Linn (Linnell) E. Trimbell, CPP October 09, 2012 at 12:12 PM
You are absolutely "spot on" Fran! It really gets my blood boiling when Obama tries to take credit for the 7.8 per cent number. He "crows" as if he had anything to do with the “statistical reduction". The current administration has not done a thing other than borrow more money. Any real plan in improving the economy is transparent. People who are working do not have any idea how vulnerable they are. There is an "out of sight - out of mind" mentality in the working class. Our administration is "duping" everyone! LT with with with the
Fran Hopkins October 09, 2012 at 01:52 PM
Thanks for the link to the Krugman/Times article. I'm not suggesting that the U-3 "unemployment rate" number is cooked or that there's some crazed conspiracy to artificially make the numbers look better for President Obama's reelection benefit. What I'm saying is that, as someone who's been personally stuck in this unemployment debacle for more than two years, it's extremely irritating to hear Obama on the campaign trail since Friday, trumpeting the 7.8% figure as a sure sign that his policies are working and people are going back to work. They're not, and for over 23 million of us, we're not. It's just not true to suggest otherwise.
Fran Hopkins October 09, 2012 at 01:54 PM
Thanks, LT. I agree with you; if we think things are bad now, they are only going to get worse next year if this administration gets another term. We can't let that happen!
Dazed not Confused October 10, 2012 at 01:19 AM
Fran, Krugman, an esteemed economist, makes a solid case that the longer-term unemployment trend does indeed indicate the economy is recovering, albeit very slowly. "A truth that the right can't handle" - guess this includes you. You are obviously biased by your personal situation. By the way, there are also over 3 million unfilled jobs in this country, please tell us why you can't fill one of those. LT - what makes you think those of us who are working do not know how vulnerable we are? Many of us are working harder for less $$ and still thankful for what we have. Many of us also have the insight to realize that not everything is the government's fault, nor does the gov't. have the power to fix everything.
Belleville Sentinel October 10, 2012 at 03:21 AM
The current administration has not done a thing? You're right! It's actually done countless things despite the total mess made by the previous administration and a republican party determined to destroy President Obama no matter the cost to the country! For a partial list of what President Obama has accomplished thus far, check out: http://whattheheckhasobamadonesofar.com/
Patriot October 10, 2012 at 05:53 AM
The 7.8% Unemployment Numbers recently reported are quite deceptive. The Top 25 economists state that the true Unemployment numbers are more like 14% minimum. Mostly part time jobs were used in the calculation. Also people that could not find jobs anywhere and left the workforce were not counted in the cakculation. Many people that had their Extended unemployment payments run out were then allowed by the Obama adminstration to receive Disability insurance payments and they were not in the calculation either. It is also interesting to note that Employers are now hiring only part timers so they do not have to pay for Obamacare. So the number of new jobs numbers is also suspect because 2 people are now hired for 1 prior person employed (each work perhaps 20 hours per week). Any employee who works 50 hours must be covered by Obamacare and the employers would be bankrupt very quickly so they found a way around it. And of couse those really wonderful Green Jobs that Obama counts.....ones like mopping the floor, sweeping the floor, digging a hole, putting in a cement sidewalk leading to nowhere beside a highway are in the Jobs filled numbers Counted.
Patriot October 10, 2012 at 06:00 AM
Belleville and Dazed Obama has done Many things to undermine our country and it's people. All the Treaties with the United Nations which place our U.S. sovereignity in jeopardy, all the regulations that stifle small businesses, Agenda 21/Sustainable Development which is a socialist UN initiative that will cause the demise of private property and single home property ownership, investing in unproven solar energy and wind that could not exist without huge subsidies, to name a few. This Administration is corrupt and corrosive. The recent campaign donations to Obama are being investigated because they were made over the Internet from Foreign/illegal sources that did not provide complete zip code information. Krugman? Really? He has no credibility and is in Obama's camp. Restore Our REPUBLIC. VOTE for ROMNEY and RYAN= A Vote for AMERICA!
Right of Center October 10, 2012 at 12:47 PM
Be careful expressing any conservative leanings Fran. Liberals are extremely intolerant of conservative points of view in the workplace (or anyplace). You are liable to limit employment options if you are pegged as a conservative. Especially in these parts. It's best to stay in the closet. Thankfully eyes are opening and polls are turning and hopefully the nightmare is soon to end.
tryintosurvive October 10, 2012 at 01:06 PM
It kind of boils down to, if you are out of work now, how can you believe that staying the couse will make things better. The lists of what has been accomplished do not mean a thing to you personally. The spin that the government can only do so much, does not mean a thing either. Numbers getting better? getting worse? just someone's opinion. In 2008 many people voted and expected change, they just did not realize for themselves the change would be for the worse not the better.
chris October 10, 2012 at 07:08 PM
Fran kudos to you for writing this article! For all the absolute die-hard libs who won't look at facts, there are plenty out there you cannot refute. DAZED -- you put a commentary from Krugman up as the harbinger of truth??? How about this -- to arrive at this 7.8% number, you would have to have 5.5% growth rate -- something we haven't seen since 1983!!! Are you going to tell me that is in any way, shape or form possible?? Welch was 100% right to question this number. The bottom line is this folks - Obama inherited a recession, arguably a BETTER situation than Reagan inherited when you factor in the inflation 'misery index.' Obama didn't have any inflation and Reagan had an astounding 12%. However, under Reagan, there was an average of 5.6% growth during his first three years from the bottom of that recession -- AND he cut the inflation by two-thirds. Now let's look at Obama, (who had a Dem controlled Congress for two years) Inflation has gone UP two full percentage points, and our growth rate was just downgraded from 1.7% to an even more anemic 1.3%!! Fran is absolutely right -- the real number of unemployed and under-employed is staggering. I love Romney's quote from Ohio today: "People at Obama rallies keep saying four more years," said Romney when he hit the stage at about 8 p.m. "They should be saying four more weeks!"
Dazed not Confused October 12, 2012 at 03:01 AM
Chris, you disparage Krugman and offer Jack Welch as an alternative? Thank you for the best chuckle of they day! I'll let you get back to your Fox news now.
Belleville Sentinel October 12, 2012 at 06:25 AM
As with so many other republican half-truths and falsehoods, this regularly appearing assertion that President Obama had total control of Congress during his first 2 years is patently false. He did have a filibuster-proof Senate for the last 4 months of 2009. For those who need a stroll down memory lane to recall (or learn) the correct history, I refer you to: http://cjonline.com/blog-post/lucinda/2012-06-01/no-obama-did-not-control-congress-his-first-two-years
chris October 12, 2012 at 01:21 PM
I said Dazed, that Welch was right in questioning the numbers. You don't address the facts do you? Again - "to arrive at this 7.8% number, you would have to have 5.5% growth rate -- something we haven't seen since 1983!!! Are you going to tell me that is in any way, shape or form possible??"
chris October 12, 2012 at 03:45 PM
Oh Lucinda's blog from the Topeka Newspaper -- now THAT's the bastion of political commentary I go to for ALL my analysis -- thanks Belleville for my Joe Biden-esque laugh of the day.
Patriot October 12, 2012 at 06:20 PM
Belleville Sentinel Take off your occluded "red"colored glasses and face the truth. You speak of half-truths and falsehoods?.... Why not the blatant lies that Biden spewed in the debate last night concerning the grotesque murder of our Ambassador in Libya and three other Americans. It was disgusting! This administration denied requests to protect or even attempt to rescue our men in Libya because it would have proven that the situation in the middle east is not getting better. The US is in horrible shape. They are bankrupting our great country and continue to LIE to the American people. THEY BOTCHED THE JOB just like they have botched handling our economy, are unemployment and they have IGNORED OUR CONSTITUTION. They can throw Billions of dolars away on Solindra and other stupid Green companies but the choose not to protect their own. There is a dictator in the WH lying to the American people and you choose to be blinded by the pap they are dishing out. You have socialism running rampant and congressmen that are afraid to vote against this administration. Each minute of the day the noose tightens against our freedoms and liberties. This administration is the worst in our history. Some day you will wake up and find that you no longer have rights: not to property, choice, or pursuit of happiness.
Dazed not Confused October 13, 2012 at 02:41 AM
Chris, Thanks for asking. How about the fact that the BLS has produced these statistics using the same methods for many years, and has a good audit record. There is nothing but Welch's assertion to suggest there was any wrongdoing. Even our friend Fran did not suggest this. Re. your 5.5% growth 'requirement,' your formula is not consistent. Growth is within the margin of error. I'm not a huge fan of Obama either and I don't think he has the cajones to get involved in manipulation. He's no Nixon or Clinton... Back to the numbers..Don't like Krugman? Try this: http://www.businessweek.com/news/2012-10-12/surprise-jack-welch-missed-shows-better-u-dot-s-dot-growth-economy
Gloria October 14, 2012 at 01:01 PM
Love this one Fran. You can see the glass in the water. Keep posting!


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