After Further Review: Real Unemployment Is 23%.
Seemingly defying logic, reason, and math; the number of jobs created in April was at 115,000. This was far below expectations, and even lower than in March. Yet, the unemployment rate announced by the Department of Labor dropped, from 8.2% to 8.1%. Balderdash! Also, there are officially 3.4 unemployed people for every job opening as the press shouts “Job Openings in U.S. Rise to Highest Level Since 2008.” We’ve got a long way to go just to get back to the 1.8 persons per job opening at the start of the recession, December 2007.
April’s unemployment rate announced by the Labor Department and championed as mild progress by the media reminds me of the George Bernard Shaw “beware of false knowledge; it is more dangerous than ignorance.”
Real Unemployment Is 23%
The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.
The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.
Unemployment nationwide edged down to 8.1% in April from 8.2% in March, but the stagnant economy generated just 115,000 new jobs, which is by far the weakest showing in six months, according to a report from the U.S. Bureau of Labor Statistics.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in April. The manufacturing workweek edged up by 0.1 hour to 40.8 hours, and factory overtime rose by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours.
This means workers aren’t making more money, and therefore cannot spend what they do not make. In April, average hourly earnings for all employees on private nonfarm payrolls rose by 1 cent to $23.38. Over the past 12 months, average hourly earnings have increased by 1.8 percent. In April, average hourly earnings of private-sector production and nonsupervisory employees rose by 3 cents to $19.72.