Friday, January 09, 2009
Not only has the unemployment rate risen sharply to 7.2%, but the number of workers only able to find part time jobs (or have had their hours cut for economic reasons) is now over 8 million.
this is why it is critical to look at BLS unemployment reporting which includes the underemployed in the calculation in order to get an accurate picture of household economic stress. the u-6 rate reported by the BLS does so, and as noted in november this is likely the appropriate measure to examine for historical comparisons.
the december reading for u-6 shot up to 13.5%, from a revised 12.6% in november and 12.0% in october. one in seven american workers are now either unemployed or have been forced into reduced hours/benefits -- and for good measure, as one can tell from the chart as well as the figures, the rate of change in umemployment is still accelerating. the forecast for coming months indicates further acceleration is in the pipeline. the silver lining, if any, is that the trend in unemployment has broken rather suddenly at the top -- in other words, unemployment will likely accelerate until it stops going up at all.
UPDATE: todd harrison asserts that, if we went back to the method of unemployment calculation which prevailed prior to the clinton administration adjustments, the unemployment reading might be as high as 15-16% already. that's almost incidental, however, next to a call for a "seismic adjustment" in currency markets against the dollar, which should it come to pass will be the story of 2009.