Unemployment
Unemployment is discussed everyday so let’s provide unique insight underneath the numbers. And let’s not bury the lead. For the first time ever during June 2009, Long-Term Unemployment is greater than Short-Term Unemployment. What!? Keep reading.
And we also wanted to share our chagrin at how amazing a simple concept like “unemployment” can get convoluted by it’s many perceptions and definitions. So to combat any confusion we present two tables illustrating 16 important metrics (versus the one that gets reported everywhere). For your convenience, we categorized our email into THE NUMBERS and THE PERCENTAGES. Enjoy!
|
THE NUMBERS
JUNE 2009 MARKS FIRST TIME EVER LT UNEMPLOYED HIGHER THAN ST UNEMPLOYED
|
3.2 MILLION = VERY SHORT TERM UNEMPLOYMENT – This reflects civilians unemployed for less than 5 weeks. June 2009 registered a near 61- year high which is 635,000 above the cycle equilibrium of 2.5 million.
4.1 MILLION = SHORT TERM UNEMPLOYMENT – This reflects civilians unemployed for 5 to 14 weeks. June 2009 reflected a near 61- year high which is 2.1 million above the cycle equilibrium of 1.9 million…a staggering 110% above this long term benchmark.
3.4 MILLION = INTERMEDIATE TERM UNEMPLOYMENT – This reflects civilians unemployed for 15 to 26 weeks. June 2009 equates to a 61 year high and is a dwarfing 2.7 million above the cycle equilibrium of 756,000…a distressing 357% above this long term benchmark. Let’s keep a close eye on this!
4.4 MILLION = LONG TERM UNEMPLOYMENT – This reflects civilians unemployed for 27 or more weeks. Like “Intermediate Term Unemployment,” June 2009 equates to a 61 year high and is an overshadowing 3.7 million above the cycle equilibrium of 707,000…a staggering 520% above this long term benchmark. We’ll keep a spotlight on this as well.
15.1 MILLION = TOTAL UNEMPLOYMENT –What can anyone say? This number is atrociously high. How high? Equilibrium is about 6 million which some argue is our “frictional unemployment.” In other words, in order to get back to an “acceptable level of unemployment” we need to create 9.1 million jobs just to get back to levels last seen during 1999/2000 (insert your own hyperbole here). And just one quick personal comment about frictional unemployment (AKA acceptable levels of unemployment)…These definitions should NEVER be acceptable or the goal of any nation, state, city, or community; the goal should always be ZERO unemployment.
7.3 MILLION = TOTAL SHORT TERM UNEMPLOYMENT – This accounts for the first two categories above which measure civilians unemployed less than 15 weeks.
7.8 MILLION = TOTAL LONGER TERM UNEMPLOYMENT – This accounts for both intermediate and long term unemployment which measure civilians unemployed greater than or equal to 15 weeks.
-563,000 = TOTAL SHORT TERM UE LESS LONGER TERM UE – This is the tempest in the already broken tea-cup. Yes. That’s a negative number and the first time EVER that our short term less longer term unemployment metric has ever turned negative. EVER! In normal market conditions, we should see about 2.5 million MORE civilians classified as “short term unemployed” versus civilians classified as “longer term unemployed.”
Table I – Eight “U” Statistics for the USA
(numbers in thousands)
|
Date
|
CU-1
< 5
Weeks
|
CU-2
5 to 14
Weeks
|
CU-3
15 to 26
Weeks
|
CU-4
>= 27
Weeks
|
CU
1+2+3+4
|
ST
Unemp
|
LT
Unemp
|
ST – LT
Unemp
|
|
Jun 1994
|
2,757
|
2,449
|
1,155
|
1,580
|
7,941
|
5,206
|
2,735
|
+2,471
|
|
Jun 1995
|
2,744
|
2,354
|
1,031
|
1,235
|
7,364
|
5,098
|
2,266
|
+2,832
|
|
Jun 1996
|
2,552
|
2,162
|
985
|
1,370
|
7,069
|
4,714
|
2,355
|
+2,359
|
|
Jun 1997
|
2,562
|
2,175
|
1,009
|
1,076
|
6,822
|
4,737
|
2,085
|
+2,652
|
|
Jun 1998
|
2,546
|
2,079
|
824
|
789
|
6,238
|
4,625
|
1,613
|
+3,012
|
|
Jun 1999
|
2,521
|
1,773
|
812
|
812
|
5,918
|
4,294
|
1,624
|
+2,670
|
|
Jun 2000
|
2,579
|
1,753
|
616
|
627
|
5,575
|
4,332
|
1,243
|
+3,089
|
|
Jun 2001
|
2,808
|
2,025
|
822
|
710
|
6,365
|
4,833
|
1,532
|
+3,301
|
|
Jun 2002
|
2,711
|
2,654
|
1,382
|
1,641
|
8,388
|
5,365
|
3,023
|
+2,342
|
|
Jun 2003
|
2,906
|
2,745
|
1,453
|
2,100
|
9,204
|
5,651
|
3,553
|
+2,098
|
|
Jun 2004
|
2,677
|
2,387
|
1,284
|
1,847
|
8,195
|
5,064
|
3,131
|
+1,933
|
|
Jun 2005
|
2,657
|
2,371
|
1,038
|
1,387
|
7,453
|
5,028
|
2,425
|
+2,603
|
|
Jun 2006
|
2,696
|
2,079
|
985
|
1,163
|
6,923
|
4,775
|
2,148
|
+2,627
|
|
Jun 2007
|
2,533
|
2,134
|
1,142
|
1,167
|
6,976
|
4,667
|
2,309
|
+2,358
|
|
Jun 2008
|
2,733
|
3,012
|
1,345
|
1,621
|
8,711
|
5,745
|
2,966
|
+2,779
|
|
Jul 2008
|
2,884
|
2,853
|
1,450
|
1,718
|
8,905
|
5,737
|
3,168
|
+2,569
|
|
Aug 2008
|
3,242
|
2,874
|
1,568
|
1,878
|
9,562
|
6,116
|
3,446
|
+2,670
|
|
Sep 2008
|
2,864
|
3,083
|
1,621
|
2,041
|
9,609
|
5,947
|
3,662
|
+2,285
|
|
Oct 2008
|
3,108
|
3,055
|
1,834
|
2,275
|
10,272
|
6,163
|
4,109
|
+2,054
|
|
Nov 2008
|
3,255
|
3,141
|
1,757
|
2,207
|
10,360
|
6,396
|
3,964
|
+2,432
|
|
Dec 2008
|
3,267
|
3,398
|
1,927
|
2,591
|
11,183
|
6,665
|
4,518
|
+2,147
|
|
Jan 2009
|
3,658
|
3,519
|
1,987
|
2,647
|
11,811
|
7,177
|
4,634
|
+2,543
|
|
Feb 2009
|
3,404
|
3,969
|
2,347
|
2,917
|
12,637
|
7,373
|
5,264
|
+2,109
|
|
Mar 2009
|
3,371
|
4,041
|
2,534
|
3,182
|
13,128
|
7,412
|
5,716
|
+1,696
|
|
Apr 2009
|
3,346
|
3,982
|
2,531
|
3,680
|
13,539
|
7,328
|
6,211
|
+1,117
|
|
May 2009
|
3,275
|
4,321
|
3,054
|
3,948
|
14,598
|
7,596
|
7,002
|
+594
|
|
Jun 2009
|
3,204
|
4,066
|
3,452
|
4,381
|
15,103
|
7,270
|
7,833
|
– 563
|
|
Jun 2010
|
CO
|
CO
|
CO
|
CO
|
0
|
CO
|
CO
|
CO
|
|
Jun 2011
|
CO
|
CO
|
CO
|
CO
|
0
|
CO
|
CO
|
CO
|
|
Jun 2012
|
CO
|
CO
|
CO
|
CO
|
0
|
CO
|
CO
|
CO
|
|
Min
|
973
|
394
|
96
|
48
|
1,511
|
1,391
|
168
|
– 563
|
|
Equilibrium
|
2,569
|
1,936
|
756
|
707
|
5,968
|
4,629
|
1,475
|
+2,496
|
|
Max
|
3,974
|
4,321
|
3,452
|
4,381
|
16,128
|
7,596
|
7,833
|
+4,622
|
|
Jun 09 vs. EQ
|
+ 635
|
+ 2,130
|
+ 2,696
|
+ 3,675
|
+ 9,136
|
+ 2,641
|
+ 6,359
|
– 3,059
|
|
THE PERCENTAGES
3 of 6 “U-Stats” REACH 61 YEAR HIGHS DURING JUNE 2009
|
4.9% = LONG TERM UNEMPLOYMENT (U1) – This reflects the percent of civilian labor force unemployed for 15 weeks or longer and is the baseline metric for labor underutilization. This June figure is far above the equilibrium rate of 1.4%.
5.9% = LONG TERM UE + TEMP JOB HOLDERS (U2) – This stat takes U1 and accounts for persons who completed temporary jobs. Like U1, U2 is far above the equilibrium rate of 2.7%.
9.7% = LONG TERM UE + SHORT TERM UE + TEMP JOB HOLDERS (U3) – This is the official rate of unemployment everyone is quoted everywhere. It accounts for U1 + U2 + the percent of civilian labor force unemployed for less than 15 weeks. The long term equilibrium for this traditional metric is 5.5% and the max level since 1948 is 11.4%. We all need to keep an eye on U3 when this metric hits 10%, 11% and 12.0%…each a psychological barrier in and of itself.
10.1% = LONG TERM UE + SHORT TERM UE + TEMP JOB HOLDERS + DISCOURAGED WORKERS (U4) – OK…you’re getting the hang of this now. U4 = U1 + U2 + U3 plus discouraged workers defined as those who want a job but have given up the search for work because they believe no jobs are available for them. Unfortunately, U4 is currently at a 61 year high and has a long way to traverse down towards its equilibrium of 5.7%.
10.9% = LONG TERM UE + SHORT TERM UE + TEMP JOB HOLDERS + DISCOURAGED WORKERS + MARGIALLY ATTACHED WORKERS (U5) – The sum of U1 through U4 plus “marginally attached workers” which are workers whom want a job and are available to work now, and have looked for a job in the past year–but not in the past month for a wide range of reasons that extend beyond discouragement over job prospects. Like U4, U5 is also at a 61 year high and has a long way to traverse down towards its equilibrium of 6.1%.
16.8% = LONG TERM UE + SHORT TERM UE + TEMP JOB HOLDERS + DISCOURAGED WORKERS + MARGIALLY ATTACHED WORKERS + FORCED TO WORK PART TIME (U6) – This is the broadest measure of labor underutilization and is the sum of U1 to U5 plus persons who are actually employed but who work fewer hours than they would like (sometimes referred to as underemployed). As with U4 and U5, U6 is at a 61 year high and is high above its long term equilibrium level of 9.1%.
0.4% = DISCOURAGED WORKERS (U4 less U3) – This calculation simply isolates the percentage of discouraged workers. Although a relatively small number, it is close to reaching a 61 year high of 0.5%. The semi-good news is that discouraged workers did not increased dramatically, which may speak volumes about the inner core of America’s “rugged individualism” and/or tenacity for survival! Anecdotally, we are hearing many individual cases ofstick-to-itiveness.
0.8% = MARGINALLY ATTACHED WORKERS (U5 less U4) – This calculation isolates marginally attached workers. Although a relatively small number, it is close to reaching a 61 year high of 1.0%.
5.9% = FORCED TO WORK PART TIME (U6 less U5) – This calculation isolates workers forced to work part time. Unfortunately, this is one of the eye-popping numbers with ominous repercussions regarding our economy and quality of life. 5.9% reflects an all time high and has doubled over the prior 12 months from the long term equilibrium level of 2.9%. This is a statistic that gets nil attention yet is a critical metric in diagnosing the direction and health of our economy. Stay tuned!
Table II – Nine “U” Statistics for the USA
|
DATE
|
U1
|
U2
|
U3
|
U4
|
U5
|
U6
|
U4-U3
|
U5-U4
|
U6-U5
|
|
June 1994
|
2.0%
|
2.6%
|
6.2%
|
6.6%
|
7.5%
|
11.3%
|
0.4%
|
0.9%
|
3.8%
|
|
June 1995
|
1.6%
|
2.4%
|
5.8%
|
6.0%
|
6.9%
|
10.4%
|
0.2%
|
0.9%
|
3.5%
|
|
June 1996
|
1.7%
|
2.3%
|
5.5%
|
5.7%
|
6.6%
|
10.0%
|
0.2%
|
0.9%
|
3.4%
|
|
June 1997
|
1.4%
|
2.1%
|
5.2%
|
5.4%
|
6.1%
|
9.2%
|
0.2%
|
0.7%
|
3.1%
|
|
June 1998
|
1.1%
|
1.9%
|
4.7%
|
4.9%
|
5.5%
|
8.4%
|
0.2%
|
0.6%
|
2.9%
|
|
June 1999
|
1.1%
|
1.8%
|
4.5%
|
4.6%
|
5.3%
|
7.9%
|
0.1%
|
0.7%
|
2.6%
|
|
June 2000
|
0.8%
|
1.6%
|
4.1%
|
4.3%
|
4.9%
|
7.2%
|
0.2%
|
0.6%
|
2.3%
|
|
June 2001
|
1.0%
|
2.2%
|
4.7%
|
4.9%
|
5.5%
|
8.2%
|
0.2%
|
0.6%
|
2.7%
|
|
June 2002
|
2.0%
|
3.0%
|
6.0%
|
6.2%
|
6.9%
|
9.8%
|
0.2%
|
0.7%
|
2.9%
|
|
June 2003
|
2.3%
|
3.2%
|
6.5%
|
6.8%
|
7.4%
|
10.6%
|
0.3%
|
0.6%
|
3.2%
|
|
June 2004
|
2.0%
|
2.6%
|
5.8%
|
6.1%
|
6.7%
|
9.8%
|
0.3%
|
0.6%
|
3.1%
|
|
June 2005
|
1.5%
|
2.3%
|
5.2%
|
5.5%
|
6.2%
|
9.3%
|
0.3%
|
0.7%
|
3.1%
|
|
June 2006
|
1.3%
|
2.1%
|
4.8%
|
5.1%
|
5.8%
|
8.7%
|
0.3%
|
0.7%
|
2.9%
|
|
June 2007
|
1.4%
|
2.1%
|
4.7%
|
5.0%
|
5.6%
|
8.5%
|
0.3%
|
0.6%
|
2.9%
|
|
Jun 2008
|
1.8%
|
2.7%
|
5.7%
|
6.0%
|
6.7%
|
10.3%
|
0.3%
|
0.7%
|
3.6%
|
|
Jul 2008
|
1.9%
|
2.9%
|
6.0%
|
6.3%
|
7.0%
|
10.8%
|
0.3%
|
0.7%
|
3.8%
|
|
Aug 2008
|
2.1%
|
3.0%
|
6.1%
|
6.3%
|
7.1%
|
10.7%
|
0.2%
|
0.8%
|
3.6%
|
|
Sep 2008
|
2.3%
|
3.0%
|
6.0%
|
6.2%
|
6.9%
|
10.6%
|
0.2%
|
0.7%
|
3.7%
|
|
Oct 2008
|
2.5%
|
3.3%
|
6.1%
|
6.4%
|
7.1%
|
11.1%
|
0.3%
|
0.7%
|
4.0%
|
|
Nov 2008
|
2.5%
|
3.7%
|
6.5%
|
6.8%
|
7.6%
|
12.2%
|
0.3%
|
0.8%
|
4.6%
|
|
Dec 2008
|
2.8%
|
4.5%
|
7.1%
|
7.5%
|
8.3%
|
13.5%
|
0.4%
|
0.8%
|
5.2%
|
|
Jan 2009
|
3.1%
|
5.6%
|
8.5%
|
8.9%
|
9.7%
|
15.4%
|
0.4%
|
0.8%
|
5.7%
|
|
Feb 2009
|
3.7%
|
5.9%
|
8.9%
|
9.3%
|
10.1%
|
16.0%
|
0.4%
|
0.8%
|
5.9%
|
|
Mar 2009
|
4.1%
|
6.1%
|
9.0%
|
9.4%
|
10.3%
|
16.2%
|
0.4%
|
0.9%
|
5.9%
|
|
Apr 2009
|
4.5%
|
5.6%
|
8.6%
|
9.0%
|
9.8%
|
15.4%
|
0.4%
|
0.8%
|
5.6%
|
|
May 2009
|
4.6%
|
5.8%
|
9.1%
|
9.5%
|
10.3%
|
15.9%
|
0.4%
|
0.8%
|
5.6%
|
|
Jun 2009
|
4.8%
|
5.9%
|
9.7%
|
10.1%
|
10.9%
|
16.8%
|
0.4%
|
0.8%
|
5.9%
|
|
Jun 2010
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
|
Jun 2011
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
|
Jun 2012
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
CO
|
|
Min
|
0.2%
|
1.0%
|
2.4%
|
3.8%
|
4.3%
|
6.3%
|
0.1%
|
0.5%
|
2.0%
|
|
EQ
|
1.4%
|
2.7%
|
5.5%
|
5.7%
|
6.1%
|
9.1%
|
0.3%
|
0.7%
|
2.9%
|
|
Max
|
4.9%
|
7.3%
|
11.4%
|
10.1%
|
10.9%
|
16.8%
|
0.5%
|
1.0%
|
5.9%
|
|
Jun 09 vs. EQ
|
+ 3.4pp
|
+ 3.2pp
|
+ 4.2pp
|
+ 4.4pp
|
+ 4.8pp
|
+ 7.7pp
|
+ 0.1pp
|
+ 0.1pp
|
+ 3.0pp
|
Extra 60 Seconds: Careful recommendations for the busy executive.
Article Link of the Week: On the mend – By The Economist.
Business Book Link of the Week: Free: The Future of a Radical Price – By Chris Anderson.
SEQOL Link of the Week: America’s Best Hospitals – By Avery Comarow.
Quote of the Week: “Don’t go around saying the world owes you a living. The world owes you nothing. It was here first.” By Mark Twain.
About SEQOL (Significantly Enhancing Quality of Life). We passionately feel that “responsible business practices” are about balancing both profitability AND quality of life. If you are interested in understanding more about this innovative model, receiving a 9PQ Audit (Nine Perpetual Questions that Drive Responsible Businesses) and/or receiving our upcoming SEQOL Weekly Newsletter, please contact us.
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