Question: What’s your take on the new unemployment numbers?
Paul Solman: First Friday: That time of the month again. Time for the official unemployment number, that is. Today’s is being trumpeted as yet another “green shoot.” A net job loss of only 350,000 for May and a revision that makes April look better than it had. Says Bloomberg.com: “The U.S. lost fewer jobs than forecast in May, reinforcing signs that the deepest recession in half a century is starting to abate. “
The New York Times: “The American economy shed another 345,000 jobs in May as the unemployment rate spiked to 9.4 percent, but the losses were far smaller than economists anticipated, amplifying hopes of recovery.”
The only discouraging word heard was that the unemployment RATE went up to 9.4 percent, explained in part by more people looking for work (and not finding it).
Pessimists look at something called U-6, the broadest reported measure of unemployment, defined by the Bureau of Labor Statistics as: “Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.” That number did not slow at all.
(Extra credit info for the punctilious among you. The accompanying BLS “note” reads: “Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.”)
Bottom line: U-6 rose to 16.4 percent this month. It was 9.4 percent a year ago. And, as we pointed out in a report back during the ‘jobless recovery’ of 2003, even dreary U-6 doesn’t include the many more people now in prison in this country, compared to the last high point of official unemployment (1982) and all the millions of Americans absolutely out of the workforce because they’re on disability.
Given their great difficulties in finding work, compared to the average job seeker, if both prisoners and the disabled were in the job market, the unemployment rate would be substantially higher.
So, green shoots? Eats shoots and leaves? Well, the numbers are better than they have been and the upward revision in April payrolls is a big change from recent months, when all revisions went the other way. That’s all one can say for certain. As to the future, remember: why should economists be able to predict it any better than historians can? They can’t.