U-6 unemployment number suggests recovery has not started

Posted Nov 24th 2009 3:00PM by Mark Fightmaster
Filed under: Economic Data, Financial Crisis

While this article is a few days old, I still found its message rather interesting. Jeff Cox's article takes a look at the U-6 number of unemployment. This number is the "broadest" measure of unemployment, and it shows that roughly 17.5% of Americans are either without a job or underemployed. This is the highest reading since the U-6 number became an official labor statistic in 1994. The U-3 rate (which is what most investors follow) came in at 10.2% in October, which was the highest reading since June 1983.

What does all this mean? cox interviewed Michael Pento, chief economist at Delta Global Advisors, who warned that the jobs situation may suggest that we are not in the midst of a recovery. In fact, Pento believes that we may see the economy flatline and trudge sideways as small businesses try to grow. This growth could lead to the hiring of some of the jobless workers. What has lead to the high number of un- and underemployed workers? Blame it on the fall of real estate, which has housed as much as 40% of the new jobs created early in this decade.

With such a large number of people out there hunting for jobs, it is going to be a while before the workforce is replenished. Once the workforce is replenished, then there will be enough money pouring into the economy to warrant talks of a recovery. Bottom line: as long as we are in the throes of double-digit unemployment, it is tough to suggest that we are in a recovery.

Tags: double-dip recession, Double-dipRecession, inthenews, jobless, jobs, recession, recovery, unemployment

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Reader Comments (Page 1 of 1)

11-25-2009 @ 8:09AM

Virgil Bierschwale said...

Started?

It hasn't even bottomed and the reason why is that the corporations are not investing in America anymore per this chart I generated yesterday from the latest GDP numbers.

http://keepamericaatwork.com/?p=5347

People can blame this on whatever they want, but if the corporations are not hiring in America and in fact are sending their plants and jobs offshore, things will continue to deteriorate

Virgil
http://www.KeepAmericaAtWork.com