New Unemployment Numbers – Highest Rate in 25 Years

The Bureau of Labor Statistics released its report of the May unemployment situation today. The official unemployment rate is now 9.4 percent – a 25 year high – which translates to 14.5 million Americans out of work.

But that 14.5 million does not account for millions of others who are also unemployed or (at best) underemployed.

The 9.4 percent May unemployment rate is based on 14.5 million Americans out of work. But that number doesn’t include discouraged workers, people who gave up looking for work after four weeks. Add those 792,000 people, and the unemployment rate is 9.8 percent.The official rate also doesn’t include “marginally attached workers,” or people who have looked for work in the past year but stopped searching in the past month because of barriers to employment such as child care, poor health or lack of transportation. Add those 1.4 million people, and the unemployment rate would be 10.6 percent.

_The official rate also doesn’t include “involuntary part-time workers,” or the 2.2 million people like Noel who took a part-time job because that’s all they could get, plus those whose work hours dropped below the full-time level. Once those 9.1 million workers are added to the unemployment mix, the rate would be 16.4 percent.

All told, nearly 25 million Americans were either unemployed, underemployed or had given up looking for a job in May.

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Even the more realistic rate of 16.4 percent given above does not include all the unemployed. Consider as well the people who didn’t even qualify to get on the unemployment rolls in the first place – small business owners who have had to shut down, those who were part-time workers to begin with, those who did not work the minimum length of time required for benefits prior to losing their job, and those who may have been part of the “underground” cash-only economy.

If you actually counted every unemployed and underemployed person in the US, you’d probably come up with a figure just over 20 percent unemployment – like this data from ShadowStats.com.

If there is any “less bad” news to be found in the BLS report, it is that only 345,000 jobs were lost in May, the lowest number of monthly losses since September ’08.  This is still a horribly huge number of lost jobs but if the losses are decreasing each month it may mean that a bottom is somewhere on the horizon.

The report also indicated that the number of people continuing to draw unemployment benefits dipped for the first time in 20 weeks despite the record number overall. But this may not actually be “less bad” news. The tsunami of layoffs was surging at its highest levels in late fall of ’08, just over six months ago. I think it would be a safe bet to say that a large percentage of those who have fallen off the rolls may have exhausted their benefits without yet finding work.

The six to nine month window for drawing unemployment benefits is closing for those who were hit earliest. With millions of unemployed overall, millions of them no longer able to draw benefits, and the heat of July and August approaching, we may be in for an ugly summer.

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