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Are the August unemployment numbers reliable?

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According to the Labor Department, the unemployment rate increased to 9.7% during August -- hitting the highest level since June 1983.

The report showed that employers cut a net total of 216,000 jobs. The number of jobs cut was less than July's 276,000 (which was upwardly revised) and was the lowest reading in a year. Economists expected job cuts to come in at 225,000. As for the unemployment rate, expectations called for 9.5%.

What is known as the underemployment rate, the number of laid-off workers settling for part-time or no work, totaled 16.8% -- the highest reading on records dating back as far as 1994. Currently, 14.9 million Americans are unemployed.

Let's not forget that President Obama and the Fed both expect the unemployment rate to reach 10%, does this mean we are nearing the worst? I'm not sure, as there were upward revisions to both June's and July's unemployment numbers. Reading these numbers, I am a bit concerned about how accurate they are. What if the August numbers are revised higher and then top expectations?

The bottom line is this: our economy is weak, and it is expected to get weaker. If you are heading into college and want to ensure that you are going to have a job upon graduation -- think health care. This was the only segment of the employment data that showed an increase.

It is going to take time for us to emerge from our current economic doldrums, but predictions sure make it look like we are near the bottom. Let's see what the next month has in store -- an unemployment rate of 10% is the magic number. If we hit 10% then rebound, all will be good in the world. If we hit 10% and keep plunging, we could see dogs and cats living together -- mass hysteria.

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Last updated: November 28, 2009: 02:45 AM

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