Shop Notes

Economy still has long way to go

Posted: May 7, 2010 | Tags: Bureau of Labor Statistics, economy, unemployment

The April unemployment numbers came out today, and the headline news is that unemployment crept up from 9.7% to 9.9% - despite the creation of 290,000 new jobs.

As always, though, my interest lies in another piece of the data set released monthly by the Bureau of Labor Statistics. I like the A-15 and A-16 tables, which track people not in the labor force. And no, that's not the same as people who are unemployed. To count as unemployed, someone must have actively sought work in the last four weeks. If you give up looking, you're not counted as unemployed, even if you don't actually have a job.

That's where the A-15 and A-16 numbers come in. Those data sets include people technically unemployed, plus people who are discouraged workers. The A-15 table also includes people working part time for economic reasons, which in lay person language means people who would like a full time job but can't find one.

Those numbers are much, much higher than the 9.9% unemployment rate cited in the headlines. In April 2010, 16.6% of Americans were either unemployed, working part time involuntarily, or people who want a job but aren't looking any more. A year ago, that number was 15.4% - although these April numbers are down from a high in March 2010 of 17.5%.

The ranks of discouraged workers have grown more than 50% since this time last year. In April 2009, 740,000 people were identified as discouraged, meaning they want a job but haven't looked in the last four weeks. In April 2010, almost 1.2 million people fall into that category.

In a not unrelated statistic, also in today's release, 46% of the people technically classified as unemployed have
been out of work for 27 weeks or more. That's more than six months. That's a long time to be actively hunting for work, and you can imagine that some of those unemployed workers fall into the discouraged category after six-plus months of pounding the pavement. A year ago, in April 2009, 27.5% of the unemployed had been out of work that long.

That the economy is adding jobs is a good sign of economic recovery, as is the drop from the March high figures for people wanting jobs. But digging beyond the main unemployment numbers suggests the economy still has a long way to go.

(As a technical note, the percentages of people wanting jobs, from the A-15 data set, are seasonally adjusted, as are the percentages of people out of work for 27 weeks or more. The numbers of discouraged workers, from the A-16 set, are not.)




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