click for ginormous chart

Source: Global Financial Data

 

 

A closer look at the Unemployment / Under-Employment belies much of the negative political narrative about the current employment situation and recovery from the financial collapse.

Underemployment began rising in late 2007; Unemployment started moving upwards in early 2008, and accelerated by late in the year. By the time President Bush left office in January 2009, employment was in free fall. When Obama was sworn in on January 20, 2012 2009, three quarters of the job losses of the Great Recession had already occurred.

I suspect this is the reason why enough people are willing to give the incumbent the benefit of the doubt when it comes to job creation. (A large majority of Voters still blame Bush for the Recession AND the weak recovery; see this and this). They were bad and getting worse when he came into office; 9 months or so later, Unemployment rates began to slowly, arduously improve.

Since late 2009, Unemployment has been gradually improving. This is what should be expected in a post-credit crisis recovery — sub par GDP, weak job creation, soft economic gains. And its why in a weak economy with relatively high unemployment, the incumbent mostly gets a pass.

 

 

Technical details about U3/U6 after the jump after

During the current Great Recession, there has been a lot of concern about how the economic downturn has affected different groups of people. In particular, there has been greater focus on the long-term unemployed, discouraged workers and part-time workers. When the Unemployment Rate (U-3) dropped from 8.1% to 7.8% in September, the broader Unemployment measure (U-6) remained unchanged. Economists and money managers are paying increased attention to these alternative measures of Unemployment. The Global Financial Database includes alternative measures of the Unemployment Rate as calculated by the Bureau of Labor Statistics. The standard unemployment rate is now known as U-3. The alternative measures now include U1 through U-6. These are:

U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force (File UNUSA1M)

U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force (File UNUSA2M)

U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate) (File UNUSAM)

U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers (File UNUSA4M)

U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force (File UNUSA5M)

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force (File UNUSA6M)

Persons marginally attached to the labor force are those 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 past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. 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. Updated population controls are introduced annually with the release of January data.

Data for U-1 go back to 1948, for U-2 back to 1967, for U-3 back to 1890, and for U-4, U-5 and U-6 back to 1994.

 

Source: Global Financial Data

 

Thanks, Ralph !
Ralph Dillon rdillon@globalfinancialdata.com

Category: Data Analysis, Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

23 Responses to “Unemployment/UnderEmployment (U3/U6) 1994-2012”

  1. Robert M says:

    The unemployment picture graph is a good one. What it lacks is more perspective. In the late 70′s the discussion of the unemployment rate was would it ever brake 7-8% and was it even good for it to. If you look at the chart it isn’t till the bust of the dot com bubble that employment reached the levels of 4% and the debate became was that sustainable. A more meaningful chart would be the composition of the work force vis a vis income. Since the 1970′s male participation has declined, women has increased yet income is down over that time. It is the income disparity or more correctly, the lack of income growth that is the issue.

  2. silverfox8028 says:

    May not apply to this issue, but I’m a Republican Committee person in surburban Phila. Never saw a voter turnout like this morning…usually no more than 20 cars at 7:00 am…today over 200. Same with other voting locations around here…cars parked everywhere. There’s no hotly contested state races, so what’s happening? Going to be interesting…the results that is…a blowout or a putdown…something BIG afoot?

  3. Conan says:

    Let’s say that the share holders of a very large world class company had had a CEO for 7 or 8 years and they were not happy with his performance. Then sales hit a free fall and plummeted to decade low numbers.

    So being tired of the current guy’s performance they go out and look for a man of change, someone who can turn this around, provide leadership, get things done in a difficult situation. Win over his enemies and make it happen. Get the deal done and the company growing again!

    However 4 years later the shareholders have doubts about this. Instead of focusing on growing sales the new CEO focused on the cost of the companies Health Insurance. Important, but not really the top line growth that they hired him for. Was he able to get things done in adverse conditions like the other guy from the same school, Bill? No he couldn’t Sell it!!

    So now where are we today? Doubting our current CEO and wondering about getting another.

  4. Greg0658 says:

    I’m in the central planner camp that each village needs just so many job descriptions of each .. take a village of 100 people & scale up from there .. and this is hypothetical at first to be adjusted for perfection as time goes on:
    farmer food growers = 10
    miners of ore = 20
    refiners of ore = 20
    manufacturers = 10
    delivery folks = 5
    doctors, nurses = 4
    teachers = 5
    garbage collector = 2
    fluncky laborers = 10
    bankers = 1
    MSM press = 3
    artists = 5
    pastor = 1
    soldiers, police & fire = 4 + volunteers from all

    maintain Balance – most capable in each position .. capability = IQ and muscle/bone mass
    screw free market capitalism is the best path to prosperity .. that idea leads to shucking responsibility to skate via scam’in

  5. martin66 says:

    “When Obama was sworn in on January 20, 2012,…”

    ~~~

    BR: Doh! I’ll fix above

  6. AHodge says:

    its a recovery-its weak
    as for
    ” to be expected in post credit crisis
    i aint buying it
    to repeat its partly broken finance

    you could take sheila bair’s latest word
    “still bloated financial sector”
    should have put down a couple bad apples
    toxic assets have never been deal with

  7. franklin411 says:

    You have a major typo in there: You say “When Obama was sworn in on January 20, 2012, three quarters of the job losses of the Great Recession had already occurred,” but I’m fairly certain you mean 2009.

  8. cjb says:

    Conan
    A CEO gets to fire his enemies. If one of his vice presidents said that the #1 priority of his division was to make sure the CEO was one 4 year contract and out, that VP would be gone in a second.
    Wish people would stop trying to draw analogies between business and government.

  9. Conan says:

    I just noticed that this graph goes back to 1994. So in the 18 years covered, the low of today is still higher than the highest high for other periods. Looking on the internet you have to go back to the 1982 peak to find a worse result. Even at this the 82 Peak did not drag out a recovery for so long as this one. So in absolute terms are we better off, of course, the hole isn’t getting deeper. However in relative terms this is the worst rate of improvement in decades.

    ~~~

    BR: The appropriate comparison, as R&R have made clear, are post credit crisis recoveries — not normal business cycle downturns…

  10. Conan says:

    Also I would like to address this enabling behavior of saying, “Woe is me, I inherited a recession!!”

    Ronald Regan was in office from January 20, 1981 – January 20, 1989 and he had recessions. One before going in from Jan to July of 1980 and thus a weak economy when he assumed office and another right off the bat in July 1981 to Nov of 82.

    George W Bush had a recession had to him on for his Inauguration and it was a major bust on Wall Street to boot. He assumed office on Jan 20th 2001 and the recession was from March 2001–Nov 2001.

    Barack Obama assumed office on Jan 20th 2009. The recession was from Dec 2007 – June 2009.

    So since 1981 (41 years of history) we have had 5 Presidents, 3 of them or 60% had a “BAD” economy as an Inauguration present. All them were astute politicians campaigning for office and were not innocent babes nor dupes when they received the prize. They knew what was happening in the world and what the American people expected a President to do, fair or unfair, right or wrong, they took the position, they they own the heat.

  11. Joe Friday says:

    BR: “Underemployment began rising in late 2007; Unemployment started moving upwards in early 2008, and accelerated by late in the year.

    And long-term unemployment (AKA jobless workers exiting the national labor pool) began it’s dramatic rise early in the Chimpy Bush administration:

    Employment-Population Ratio

  12. James Cameron says:

    > Also I would like to address this enabling behavior of saying, “Woe is me, I inherited a recession!!”

    See . . . BR’s . . . comment . . . under . . . your . . . previous . . . post!

  13. Conan says:

    R & R ‘s book is a must read and I agree a debt recession is not a normal business cycle recession.

    However I believe it would be hard to argue that the double dip recession of 1980 & 1981 was a normal business cycle recession when the Fed was raising rates to historic levels to combat inflation.

    I would also refer you to Doug Shorts chart “Regression to the Trend” and ask you to note that the bubble that burst in 2000 was larger that that in 1929. Thus I would also argue then that this was not an average business cycle recession.

    So bottom line the root causes for all three examples maybe different, but they were all tough economic times. None of these three examples were normal swings in the economic cycle. Thus to just say that our current President is the only one to face adversity upon receiving the prize that he so truly desired is a bit disingenuous and diminishes the difficulties that others faced.

    My father was a military man and he used to say to me that in times of peace and Officer was just and administrator. In times of war you found out who were the soldiers. Thus I can apply the same adage to our Commandeer and Chief. It is the adversity that he faced and the results that he achieve that defines the man.

  14. DeDude says:

    @Conan,

    All recessions are different. All dependent on what is causing the slowdown in the economy you can expect a slow or quick recovery. If the slowdown is from the Fed’s jacking rates into the sky then the recession will ease as soon as the Fed decide to get rates down again. Downturns caused by a financial crisis are usually very deep and very long (http://oregoneconomicanalysis.wordpress.com/2012/09/24/checking-in-on-financial-crises-recoveries). Anybody with the slightest understanding of what a financial crisis is and how it normally plays out would have to agree that Obama has done pretty well with keeping this one under control and turning it around.

  15. Conan says:

    DeDude-

    When Obama won in 2009 and the crisis was already 13 months old. Did he focus on the economy? Did he ask for the Glass–Steagall Act to be reinstated? Did he ask to re look at the Commodity Exchange Act? Did he ask for Derivatives to be regulated? Did he arrest and jail Bakers or Wall Street types? Did he push for a Swedish style take over of the banks? Did he listen to Volker, Buffet or Blair?

    On February 17, 2009, Obama signed the American Recovery and Reinvestment Act of 2009. That’s it. He next spent all his political energy to get the Health Care Act passed. Which is his legacy legislation, not economic reform nor dealing with the economy.

    So did he do nothing, of course he did something, but was it enough and was it his priority? I say the evidence says NO! He wasted to many opportunities to truly make a change. Larry Summers and Tim Geithner won for the staus quo. No Great Depression, thanks!, but we got a Great Recession without any meaningful reform or lessons learned.

  16. HowardA says:

    Here’s another (and I think more meaningful) way to look at the labor situation. From 2000 thru the bottom of the labor trough in Feb 2010, the Employment Rate (Employed/Population) for the 16-65 age group, dropped 8 pts from 76% to 68%. In 2000 the Unemployment Rate was 5%. If the Labor Participation rate had stayed unchanged, the Unemployment Rate in Feb 2010 would have been 15%. This is 50% more than the reported 10%. (In 2000 the Labor Participation rate for 16-65 year olds was 81%. 100-68/81=15.) Since Feb 2010 the Unemployment Rate has apparently improved about 2%, so the recalculated Unemployment Rate would currently be 13%. Please let’s not blame Obama, the employment rate deteriorated while the Republicans had RESPONSIBILITY for the economy: from 2002-2009.

  17. Roanman says:

    The shame of this election is that neither candidate has had much to say about the fact and cost of American troops stationed in 60 plus countries around the world, the ongoing bleeding of our resources brought about by our Neocon adventures started by Bush, shamelessly continued by Obama and shamelessly endorsed by Romney. That’s three shames in one sentence, four if you consider the entirety of the Bush/Obama administration as being a damn shame.

  18. Conan says:

    DeDude thanks for the article you quoted, but I have to ask you to read it again and look at Norway and Sweden. Then ask yourself what did they do that Obama didn’t. Even Barry here on the Big Picture was saying to all that would here to look at Sweden. Maybe we should have sent him to the White House! Maybe he would have given us some perp walks!

  19. James Cameron says:

    > Here’s another (and I think more meaningful) way to look at the labor situation.

    And here’s another . . .

    * From the beginning of 2008 through January of 2009 over 4.4 million jobs were lost – this is the hole Obama was presented with
    * The jobs losses in 2001 and 2002 due to the bubble and 9.11 totaled 2.3 million, less than the total lost in the first three months of 2009 (818,000 in January 2009 alone)
    * Over 5 million jobs were lost in 2009
    * Total job losses from the beginning of 2008 through the first two months of 2010 were 8.67 million, far exceeding the job losses during the recessions of the previous administration
    * If you beginning an administration’s clock in July – which is far more reasonable than January – Bush lost over 1.5 million jobs, Obama created over 3.6 million.

    This is all based on current BLS data.

    Comparing the financial bust with the recessions that occurred during the previous administration is inane. They’re totally different beasts.

  20. Biffah Bacon says:

    @Conan-it’s not as if Obama has magic powers or the position of king-he is the president only and there is no way he can wave a magic wand and fix everything even if he wanted to. He further has to juggle not only his political opponents, who were organizing from the start to screw him and the entire world if necessary, but his political allies who missed no opportunity to stab him in the back (Lieberman! Blue Dogs!). Obama could walk on water and the wingnuts would joke that he couldn’t swim, and Lieberman and his ilk would try and steal his shoes.
    Health care reform of some kind was necessary and right because it is a growing crisis for both citizens and government funding (trapped in a protection racket with insurance companies). Lots of other things that seemed possible at his start were discovered to be impossible-prosecute Wall Street and you will be involving both houses of Congress and many executive branch agencies with unfortunate involvements; No one would let him close Gitmo; let the political prisoners free and you piss off the military and give the R’s a huge flag boner; Single payer insurance would have wiped out the health insurance industry and cut the caviar, private jet and yacht business to boot; and ending the Bush tax cuts would have required sticking it to the suffering middle and working class who are being pinched by health insurance, local taxes, high fuel and food costs and shrinking availability of jobs that pay middle class wages thanks to Clinton’s NAFTA and Bain’s bust-out program.
    There are no easy solutions and no magic people to implement them. Just hard choices and plenty of time for regret. In the meantime, the climate problem is fixing to solve itself by reducing demand for carbon energy via population reduction.

  21. Conan says:

    A Lion, a Grizzly Bear and a Shark are all different beasts, but none the less dangerous for the fact. I find this perennial fascination that the worst recession encountered by a President since WWII to be somewhat reflective on who or what is trying to be justified. The argument is more that my guy had a worse recession that the other and he did a better job of dealing with than the other. On top of that it wasn’t his fault, but the guy before him.

    I have lived through all three the 1980/1981 Inflation Buster, the 2000 Dot Com Bust and the latest Debt Crisis. All three we not ordinary cyclical events all will be studied in history. Of the three in pure employment numbers, most likely the least severe was the Dot Com Bust. However this does not dimens that it was the worst such event since 1929.

    In the area of Employment the 1980/1981 Recession was no walk in the park. There was major disruption in the labor market. You can argue all day which is worse an Inflation spike (also covered in R & R’s work) and major sock ,market bubble crashing or a debt crises

    It all boils own to this is one part crisis and one part crisis management. So the argument is incomplete to discuss one with out the other. Maybe the Crisis was worse, but the management better or maybe the crisis was less and the management was average or less. But none the less these were all three major event and history will be the judge.

    Bottom line as I have said before, none of this matters, we have to learn from the past, but live in the now & the future. So was is being done to get this fixed? To correct our mistakes? and to punish anyone that did wrong?

  22. DeDude says:

    @Conan;

    Obama did not get the kind of reform through that I would have liked. But that is a different subject from “recovering employment (U3/U6) after a financial crisis”. However, he got the kind of stimulus through that was needed to stop the free fall and begin a slow recovery in GDP and employment. That is why his record for “recovering from financial crisis is so fantastic”:

    http://oregoneconomicanalysis.wordpress.com/2012/09/24/checking-in-on-financial-crises-recoveries/

    I have a long list of things that I wish Obama would have worked to get fixed. But the question is whether the alternative (in this case Romney) would fix those things or make them even worse. Most of the things that needs to be done would require a progressive majority in the house and 60 progressive Senators to get done and that will be a long time coming, if ever.

  23. Greg0658 says:

    you guys in here are the best ***** (-;

    I’ll try and help:
    just remember on HC – backburner benefit or jinx – free’r movement when your not happy at work
    sooo -ie: treat laborers better all the way up/down the ladder