Broader U-6 Jobless Rate at 16.5%: May Be Headed Higher

The U.S. jobless rate held steady at 9.5% in July, while the government’s broader measure of unemployment was also unchanged at 16.5%.

The comprehensive gauge of labor underutilization, known as the “U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can’t find full-time jobs.

Both rates held steady despite a drop in the number of people who are employed. The number of unemployed people in the work force dropped, but that was more than offset by a decline in the overall size of the work force. Though more people were no longer in the labor force, fewer of those dropouts said they currently want a job. This helped keep the broader rate steady.

The labor force data were likely affected by a temporary end to extended unemployment benefits. The Labor Department survey was conducted before the U.S. Senate expanded an extended-jobless-benefits program through the end of the year. Beginning in August many of those people who dropped out of the labor force in the last two months may return to active job seeking. If the number of jobs created remains as muted as it has been the last few months, that could send both unemployment rates higher.

Oh that's good news.