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Tuesday, November 8, 2011

Alternate Unemployment Rate Decreases to 18.2% in October

Molly's Alternate Unemployment Rate Falls to 18.2% in October  2011 from 18.4% in September 2011. 

The decrease is due primarily to a 4% decrease in the number of people working part-time who want full-time work.  According to the Bureau of Labor Statistics, there are 374,000 fewer involuntary part-time workers (people working part-time who want full-time work) in October 2011 over September 2011.  This number had been decreasing in the early months of the year; it then rose dramatically for two months, but now has decreased.  It is unclear if this is a trend or an aberration.  We'll have to wait until next month's numbers.  

Last month's analysis seemed to show that most of the new workers entering the labor force in the last few months were working part-time, but this month's data shows a reversal of that pattern, with a lower percentage of the employed work force working involuntarily part-time.  Again, we can't tell if a new pattern has been established or if this is an aberration.   

There has been a decrease of 2.6% in the number of people who "want to work" but have not actively looked for work in the past month.  In September, there were 6,241,000 in this group; now there are 6,403,000 in this group.  As the number of people "not in the labor force" (meaning not working or actively looking) was virtually the same in October as in September, this may mean that there are more people who are ready to enter the labor force: They are again "wanting a job" but haven't yet started actively looking.  That may be a good sign; it may mean that the population as a whole perceives that they can get jobs.  Again, it's unclear whether it is a trend or a monthly aberration. 

Molly's seasonally-adjusted alternate unemployment rate is 18.2% for October 2011. It is down two-tenths (.2%) of a percent from the 18.4% of September 2011.  

29,196,000, about 29 million people, are unemployed and want to work OR underemployed (working part-time and wanting full-time work) in October 2011. This is an decrease of 307,000 people from the 29,503,000 who were unemployed and/or  underemployed in September.

The details of Molly's alternate unemployment rate continue after the jump.

In seasonally-adjusted numbers, 18.2% of the American labor force (in October 2011) were either:
  • "Officially" unemployed,
  • Working part-time but wanting full-time work,
  • or "Wanting a job" but hadn't looked in the past four weeks for some reason such as being discouraged, convinced that there was no work for them, or due to family obligations.
(Unlike others who calculate alternate unemployment rates, I do not count people among the alternate unemployed unless they say that they "want to work" according to the BLS Current Population Survey. How can you count someone as unemployed if they don't want (or need) a job?)

Here's how the numbers for the Alternate Unemployment Rate break down for October 2011:
  • The number of those unemployed and actively looking for work:  13,897,000 (vs. 13,992,000 in September)
  • The number of those working part-time who want full-time work:  8,896,000 (vs. 9,270,000 in September)
  • The number of people who "want a job" but haven't looked within the last month: 6,403,000 (vs. 6,241,000 in September)
The total number of unemployed or underemployed is 29,196,000 (a decrease compared to 29,503,000 unemployed or underemployed in September).

The Alternate Work Force consists of the 154,198,000 people in the official BLS Civilian Labor Force plus the 6,403,000 people who "want a job" but haven't actively looked recently. That is a total of 160,601,000 people (compared to 160,258,000 in September.).  Molly's Alternate Unemployment Rate is the Alternate Number of Un/underempoyed as a percentage of the Alternate Work Force.

Therefore, Molly's Alternate Unemployment Rate for October 2011 is 18.18% or 18.2%.  

Molly's Alternate Unemployment Rate for October went down primarily due to a decrease in the number of people working part-time jobs who want full-time jobs.  That number, now 8,896,000, decreased about 400,000 since September.  

Who Do You Count and Where Do You Find These Numbers?

In greater detail, Molly's Alternate Unemployment Rate counts as the un/underemployed the following groups of people:

  1. All of those "officially" unemployed (actively looking) for work from the monthly BLS Employment Situation report.
  2. All of those "underemployed"; that is, those who are working part-time but who want and can't find full-time work according to Table A-8 of the same monthly Employment Situation Report.
  3. All of those who say that they "want a job" even if they have not actively looked for work in the past four weeks from the same monthly Employment Situation Report Table A-1. (This is a broader definition than the "discouraged workers" that BLS uses in calculating their U-6 number.)
The base workforce for Molly's Alternate Unemployment Rate includes the Civilian Labor Force (all of those employed, whether full or part time plus all of those actively looking for work) according to the BLS report plus the people who "want work" but have not actively looked in the past four weeks.

(As I wrote above, I do not include people who do not want a job; so if someone drops out of the labor force and tells the interviewers that they are no longer interested in obtaining a job (for whatever reason), they are not counted.)

Other comments on alternate unemployment and underemployment:

  • The "official" underemployment population consists of those people who are working part-time but want full-time work. These are the only "underemployed" people tracked and counted by the Bureau of Labor Statistics. However, people working at jobs below their skill level might are also considered "underemployed"; unfortunately, there are no national statistics on those workers.
  • For this month, October 2011, the underemployment rate is 6.3%, a decrease from the 6.6% in September, but equal to the 6.3% in August. This rate is the number of people working part-time who want full-time work as a percentage of all employed. Some writers use the term "underemployment" to include those who are unemployed as well, but I use it only for those working part-time who want full-time work.  Please remember that all of these numbers are seasonally adjusted, so the variances of people leaving summer jobs or school personnel returning to school should not impact these numbers.  
  • As usual, we need to remember that the alternate unemployment number doesn't include people working temporary but full-time jobs, people who are working micro-businesses that may not make much money, nor does it include people who have returned to work for wages much less than what they received in the past.
(Note:  All of my employment number reports are based on monthly reports and data published by the Bureau of Labor Statistics.  Monthly numbers reports are based on the current monthly Employment Situation Report.  Historical numbers are taken from various archived Employment Situation reports as indexed HERE.  The Employment Situation report includes month over month and year over year jobs numbers.  My analysis is taken from the monthly BLS data copied to an Excel spreadsheet every month.  I calculate detailed percentage increases/decreases, 3 month numbers, 2011 to date numbers, and I compare jobs numbers to those at the time of Obama's inauguration and at the "trough" of the recession.  Specifics will be provided upon request; please email me or leave a comment.)

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