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True Unemployment Rate on 10/5/2012 is 14.7%

This morning it was widely reported that the "unemployment rate" dropped to 7.8% - and that most of the drop was "the fact that many people simply stopped looking for a job."  That comment is very disrespectful to unemployed people who are working harder than ever to find a job.

The rate that is reported as the unemployment rate by the Bureau of Labor Statistics is table U3.  That table Only measures the number of people who are Receiving Unemployment Benefits.  The true unemployment rate is 14.7% and is reflected on BLS table U6 - and remains unchanged.  By the way, Congress dictates which table is used to report unemployment.  http://www.bls.gov/news.release/empsit.t15.htm

Therefore if we ended unemployment benefits, the unemployment rate would drop to 0%; and everyone would consider the jobs problem over.

If we as a country expect to solve a problem such as unemployment, it is important to report accurate information.

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Tags: October, benefits, jobless, jobs, rate, report, unemployment

Comment by Steve Fleischner on October 5, 2012 at 12:46pm

A report does not drive activity.  So whether U3 or U6 is this % or that % will have no affect on my firm's ability to hire an additional worker or not.  U6 is typically the blogging mantra of the right.  Ignoring the number of jobs created goes right along with that.  You can see in this report that historically U3 and U6 trend in the same direction:  http://www.economicpopulist.org/content/u3-and-u6-unemployment-duri...

Regards to Mitt, his time is almost up.

Comment by Bill Humbert on October 5, 2012 at 1:04pm

Hi Steve,

Regarding Mitt, I'm a political party agnostic.  He wasn't mentioned in my blog.

Regarding your other comments, I have recruited and consulted with many clients whose data was inaccurate; and many of them as a result were headed into bankruptcy.  What eventually saved them was someone making hard business decisions once their data was accurate.  Then they were able to grow again.

 

Government policies are partially dictated by data and partially by politics.  If the data is skewed by almost 90%, so will the policy be skewed. 

 

What does this have to do with recruiting?  People, their mindsets, and our clients and their mindsets all impact our industry.

Comment by Tiffany Branch on October 8, 2012 at 10:23am

After companies had to significantly reduce their headcount, many are realizing they can still operate e. Outside fficiently with less staff. Ouside of government-related jobs and giving tax breaks to employers, are always wondered what affect the goverment really has on a company's ability to employ more people.

 

If I were a firm of 1000 and now I'm at 500 and I'm making profits, why would I need to hire more people??? Maybe I'm just looking at things too simplistically.

Comment by Jason Alba on October 8, 2012 at 11:00am

Bill, thanks for sharing this and the link to the BLS site.  I have always been disgusted when I read the unemployment rates reported by the newspaper.  While they are an accurate report as far as figuring out a trend, they do a great disservice to people since the number they report is a lie, or fraudulent, or however you want to say it.

Yes, I am just a little passionate about these numbers.

And then there's the unemployment rate for veterans... which should be a national shame (but I rarely hear it reported on).

As far as a report driving activity or not, I think many businesses are making decisions based on these (and similar) reports.  Business owners and those who make purchases are either confident about the economy (and what that means for their ability to grow, or their need to cut back, or wait out a storm).  Doesn't that make sense?  If it does, then wouldn't it make sense these reports do drive activity (or inactivity)?

Comment by Bill Humbert on October 8, 2012 at 11:14am

For companies in the consumer product group, it would seem that knowing the difference between those receiving unemployment benefits and the total unemployed would help their forecasting.

 

It was said that consumers led us out of the 2001 - 2003 recession.  With so many consumers out of work in this recession, it will take time for them to do any leading.

Comment by Tiffany Branch on October 8, 2012 at 11:21am

It's terrible for Vets. I applaud companies who actively seek to hire vets.

Comment by Bill Humbert on October 8, 2012 at 11:26am

I agree with both of you.  There are some very talented Veterans out there.

Comment by bill josephson on October 8, 2012 at 12:32pm

ll,

I didn't take your piece to be political but, instead, your seeking the truth as the truth is what guides us day to day in all aspects of our lives even if not what we want to hear.

 

I know we're really at 14.7% unemployment.  And it definitely impacts everyone in our business.

The client using this information to hold out for that perfect candidate cause everyone qualified must be lined up around the corner for their "only job in town" until God arrives, requiring numerous interviews to get hired.  More resistance to utilizing your/our services believing they can 'go it alone.'  More competition with the client as larger numbers of readily qualified accessible available people by the client, as well as more qualified people accessing the client looking for jobs.  If they can find each other on their own, why do they need us?  A 14.7% unemployment rate becomes a self-fulfilling hiring prophecy.

 

The candidate opting to 'stay the course' instead of considering another position as "the devil they know is more comfortable than the devil they don't."

 

The mind set of we recruiters knowing its requiring lots more effort to achieve similar results, with no guarantee of achieving results with the business headwinds in your face.

 

Government policies, IMO, should encourage profit motive which is the only reason a business will expand operations/hire.  Reducing the cost of doing business here in the US, while eliminating profit incentives to offshore outsource is what I look for from elected officials.

 

By the way in light of what I just posted, I sure hope it is President Romney.

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