Unemployment: An in depth look

So by now you may have heard the latest unemployment report, and even I am a bit confused as to whether it was a good report, or a bad report.  It is just that with the hiring of census workers all of the numbers are going to be off until about September when all of the hiring and firing should be complete.  The spin on this one number has proven to be quite remarkable along with the incredible weight it in theory carries.  It is by all accounts only one measure of the state of the economy, and after digging into it in some detail, well it is subject to an awful lot of "factors" that may or may not be proper, depending on your point of view.  That phrase comes to mind about accounting and numbers, "Lies, damn lies and statistics".

Here is the commonly reported number and graph, which you all know and love...

And here is the number I have been wanting to report on for quite a while.  Simply put, it is the raw number of folks employed.  This accounts for nothing (or at least so I believe except for being seasonally adjusted which is fair, as there is a fair bit of seasonality to being employed). 

This is a grim picture.  I do not think anyone will be surprised, but it wipes out most of the interpretation and conjecture.  Roughly speaking, 6% of the total population that once had a job (at the peak) now does not.  Is that an inflated number of people working, well certainly, right?  Since 1948 not that many people have ever been working, however there is a bit of a problem, the 6% that no longer work are probably not happy about it and do not care about it being too high in historic terms.

Always looking forward however, and in doing so, where are the unemployment (or employment) numbers heading?  My guess is things get worse, but you knew that.  We are just at the top of the "normal" range if you can call it that, so a trip to 55% employed seems reasonable.  But this is guessing.  How are people doing now that they are unemployed?  I supposed that depends on how long they have been unemployed, as the longer you are, more likely than not the more upset you are.

The green and yellow are the scary parts of this graph.  To be out of work for 7+ months would seriously strain most households, as I suspect (no real data to back this up) that an average prepared family has like 3 months of money set aside.  The other thing, and I cannot say for sure, but how are the 15 million currently "unemployed" counted?  Is that the U1 number, or maybe the U6 number (different levels of what an "unemployed" person is).  The thing to walk away with is that this is not your normal "recession". 

And speaking of the "U" numbers, lets plot the U3 which is the commonly reported one, and U6 which includes everyone. 

As for the chart title, I did not make that up.  That is what it is called by the BLS (U.S. Bureau of Labor Statistics).  For the definitions see below
U-1 - Persons unemployed 15 weeks or longer
U-2 - Job losers and persons who completed temporary jobs
U-3 - Total unemployed, as a percent of the civilian labor force (official unemployment rate)
U-4 - U3 plus discouraged workers

U-5 - U4 plus all other persons marginally attached to the labor force
U-6 - U5 plus total employed part time for economic reasons (involuntary part time)

So in summary, things are not good and I honestly cannot see them getting better any time soon.  We had a period of time where all you had to do was breathe in order to get a job (I recall an E*Trade commercial making fun of this after the bubble in 2000).  Hopefully this gives you a clearer picture of what is taking place.