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April unemployment rate of 9.9% should be 17.1%

The unemployment figures that came out on Friday under-report the total rate as usual. If the figures included everyone not fully employed, such as those who are a underemployed and those not looking for work, the 9.9 percent figure would increase to 17.1 percent.

By Guest blogger / May 13, 2010

Blytic

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Friday’s Employment Situation report showed that in March “total unemployment” including all marginally attached workers increased to 17.1% while the traditionally reported unemployment rate increased to 9.9%.

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The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit qualification of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

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