Unemployment rate is 16.7% under fed’s broader measure

Updated Sep. 3, 2010 at 3:29 p.m.

Unemployment rate is 16.7% under fed’s broader measure

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Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of WRAL.com.

RESEARCH TRIANGLE PARK, N.C. – What’s the actual state of Labor this Labor Day weekend? B-A-D, suffice it to say.

The August unemployment rate is an awful 9.6 percent (up 0.1 percent from July), but the overall rate is even more horrible at 16.7 percent (up 0.2 percent).

That second rate counts everyone, not just people who are employed in some way or seeking work. While the “official rate” as described by the government is 9.6 percent as released on Friday, that second number is a much broader measure (U-6 is the term) and receives hardly any media attention.

It should.

Plus, a check of other often overlooked data shows the percentage of people out of work 27 weeks or longer than a year ago by almost 9 percentage points – 42 percent last month compared to 33.6 percent in August 2009. (The percentage at least is down from 44.9 percent in July.)

If you want to really understand how bad the employment situation is., then check the U-6 data as provided by the Bureau of Labor Statistics, which takes into account a much bigger dataset.

“U-6” is found under what the BLS describes as “Alternative measures of labor underutilization.” It is seasonally adjusted.

Here’s the BLS definition of “U-6:”

“U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.”

Here’s the BLS description of the various categories as listed in U-6:

“Persons marginally attached to the labor force are those 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 past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.”

While the government boasts that private sector employment has improved for eight consecutive months, the 16.7 rate is just 0.1 under the 16.8 rate of August 2009. The broader rate is down from a high of 17.1 percent in April, but the August increase is the first in four months.

Check out the data yourself here. It’s not encouraging.

And click here for the duration data chart.

"Tough Times" analysis

For more insight into what’s happening with the economy, check out LTW’s “Tough Times” package published earlier Friday:

Dr. Michael Munger of Duke warns that the U.S. could repeat the 1936 debacle when attempts to escape the Great Depression faltered.

Dr. Michael Walden at NCSU says the economy has “downshifted” and sees “puny growth.”

Dr. James Kleckley of ECU, meanwhile, is concerned about the strength of the recovery but is even more worried about long-term problems, especially in public policy.

Get the latest news alerts: Follow LTW at Twitter.

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