Official Unemployment Hits 9.5% (Reality Even Worse)
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Unemployment rose to 9.5% in June, a 26-year high, according to the U.S. Bureau of Labor Statistics. A total of 14.7 million Americans are now officially out of work, and payroll employment has fallen by 6.5 million since the downturn began in December 2007, 19 months ago. The BLS also reported this morning that yet another 467,000 non-farm payroll jobs were lost in June. That was more than 100,000 above what a consensus of economists had estimated. Job losses in May were revised to 322,000 from an earlier estimate of 345,000.
The official count – known as U3 and dutifully reported by most of the media – fails to show the true extent of the wreckage. Left out of most reporting is U6, the BLS calculation that includes involuntarily underemployed people. That is, those who want a full-time job, but can only find part-time work. Also missing from U3 are discouraged jobless people who haven’t looked for work during the past four weeks. The U6 figure rose in June to 16.5%.
The average workweek fell another 0.1 hour to 33 hours, the lowest since 1964 when the BLS began keeping statistics for that factor.
Another set of interconnected gauges of economic misery released today was the number of new claims filed for unemployment benefits, the four-week average of new claims, and the number of continuing claims. There were 614,000 new claims, the four-week average of claims – which levels ups and downs – dropped to 615,250, and continuing claims fell 53,000 to 6.7 million. The continuing claims number, however, may be affected by the fact that a growing number of out-of-work Americans have exhausted their benefits and no longer show up in these statistics. A little less than 40% of workers are covered by unemployment insurance.
In late May, 74% of economists surveyed by the National Association of Business Economists said the economy would begin expanding this quarter although they expected unemployment to continue rising into 2010 before beginning its recovery. One disturbing trend can be found in how long it took in the four previous recessions before the number of workers with jobs equaled the number employed at the beginning of those recessions. In 1974, the job recovery took 19 months; in 1981, 28 months; in 1991, 32 months; in 2001, 47 months.
Jack Healy of The New York Times reports:
"There are going to be massive, massive numbers of people who are out of work for long periods of time," said Andrew Stettner, deputy director for the National Employment Law Project. "It’s one of the most important aspects of where the economy is right now."
Although the number of people filing for unemployment insurance has leveled off recently, more workers are falling back on safety nets intended for the most troubled workers. More than 2.7 million people received emergency or extended unemployment benefits in the first week of June — the most recent period for which data was available — compared with 2 million at the beginning of the year.