“Real” Unemployment rate: 17.5%
There was a story on CNBC today that the “real” unemployment was 17.5%. That is nearly one in 5 Americans that are out of jobs. Scary joke …but i thought we are already past Halloween. Curious … I dug around to see where this number came from and if there is any merit to it. The Federal Government reports two unemployment numbers U3 and U6.
U3 is the “official unemployment rate” according to the Bureau of Labor Statistics website. This is the current measure of unemployment focused by all media and hence you and me. It 
has, over the years, slowly excluded many of the factors that USED to go into how the US reported unemployment. Hence, there was a gradual decrease in the unemployment rate regardless of what was happening in the Job market. As reported by us previously, unemployment rate was 10.2% in October. This was the U3 number.
U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as people employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule).
According to the government’s U6 number, some 17.5 percent are either without a job entirely or underemployed. The U-6 number is at the highest rate since becoming an official labor statistic in 1994. Not sure what the true unemployment rate is at this point, but my guess would be that it is somewhere between the U3 and U6 numbers. If we were to guess that the true unemployment rate was 15% – all inclusive – I bet we would not be too far off.
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Great Article. Hope the mainstream financial press gets a wind of this.