In only the last several years, you have no doubt heard more about the unemployment rate than you want to for the rest of your life. The talking heads and pundits tell you that it peaked out at 10.2 percent back in October of 2009.
They attempt to convince you that this followed from the low rate at the beginning of the Great Recession of 4.4% in March of 2007.
The official statistics tell you that it rose to 6.2% in August of 2008, 8.1% by February of 2009, 9.4% only three months afterward, and then reaching the previously mentioned high of 10.2% in October.
It may surprise you to learn that these are not the actual unemployment numbers though. In fact, when unemployment is measured according to the formula that was used when President Bill Clinton took office, it is actually around 20%. In the following text, you will see how this great disguise of actual unemployment came to be.
The Official Present Rate of Record Unemployment The currently used official unemployment number paints a picture of unemployment that is the highest that it has been since the 1983 recession. Back then, it peaked above 10% for a long ten months. Again though, these previous numbers were figured according to a different unemployment rate formula.
The Measure of Unemployment Used Today Today’s formula only counts a narrow segment of the non working population as unemployed. The people who are counted as unemployed do not currently have a job and have seriously attempted to find work over the last four weeks. They are all presently ready and willing to start work. This is called the U3 unemployment rate. It is also defined as the ratio of the civilian labor force that is aggressively seeking work but is still unemployed.
Tuesday, October 12, 2010
If you read nothing else today, read this.
Posted by traderrob at 9:33 AM