The US Department of Labor released its June unemployment report, which showed the country added 80,000 new jobs, while the unemployment rate remained the same at 8.2%.
Often times that is the only figure the news media will report, however there is a treasure trove of data the the Department of Labor releases at the same time that paints a far more detailed picture of the labor force than just the unemployment rate does.
Below are three points that I’ve picked out that I think say something important about the economy as a whole. Rather than showing signs of economic expansion, these data points show a lackluster recovery, with more than a few showing negative trends:
1) U-6 Unemployment Rate Increases from 14.8% to 14.9%
As a refresher, the Bureau of Labor Statistics has a number of metrics that they measure unemployment by, numbered U-1 through U-6. As the number goes up, the classification has a wider definition. The most common one heard on the news, and considered the “Official Unemployment Rate” is referred to as the U-3 rate.
The U-6 rate however, includes everyone considered under the U-3 rate, “plus all persons marginally attached to the labor force, total employed part time for economic reasons, as a percent of the civilian labor force and all persons marginally attached to the labor force.” In layman’s terms, it includes everyone who would like a full time job, but either only works part time, or have dropped out of the labor force entirely for lack of work.
While an increase of a tenth of a percent U-6 unemployment rate may seem small, unfortunately it is part of an upward trend. This unemployment metric is not near it’s high of 17% in April of 2010, it has gone up every single month for the past four months, which is cause for concern. While last month’s increase could conceivably be attributed to the increase in the labor force participation rate, there is no obvious reason for the uptick other than a tepid recovery.
2) African Americans and Hispanics see Unemployment Rolls Grow by Half a Million Since April.
This recession has hit African Americans and Hispanics disproportionally hard in comparison to Whites and Asians. Rather than getting better, the unemployment data shows that it is getting worst for these already hard hit groups. African American unemployment rate has increase from 13.0% in April to 14.4% in June. Of that increase, .6% was in May with an additional .8% in June, meaning a whopping 1.4% increase. Granted using a smaller population size means that small changes can look larger statistically, but an increase this large can not be dismissed. That increase accounts for nearly 300,000 additional people being unemployed.
Hispanics did do better comparatively, but still saw an increase of .7% since April, seeing rates jump for 10.3% to 11.0%. This increase translates to nearly 200,000 more unemployed workers.
3) College Aged Workers Unemployment Rates Trending Upward
College aged workers, being those aged 20-25 have seen much higher unemployment rates of around 13%. Unfortunately June data shows a remarkable spike over the May data, with the rate increasing from 12.9% to 13.7%, rolling back any gains made to February. I am sure many of you are thinking what I thought when I saw the jump and thought “That must have something to do with the school year ending in May for college students.” A reasonable assumption to make, but an incorrect one. Based on the data doing back for the past 60+ years, there is no trend of a May to June bump, effectively disproving that thesis.
Looking at the year to date figures for this age group, when broken out between the two genders, we see men disproportionally hit and experiencing a slower recovery. June 2012 had unemployment rates of 15.4% for men and 11.8% for women while June 2011 saw 15.6% and 13.3% respectively. While the lack of equal improvement is noteworthy, a gap in rates between men and women is consistent with the data for the past 25 years although the spread tends to be between 1 and two points, not 3.6.
Lastly an update to the takeaways from the May report not covered above:
1) Labor Force Participation Rate Holds Steady at 63.8%
The fact that this rate did not go up indicates there are still a decent number of people who have left the workforce but do not think economic conditions are good enough yet to rejoin. While the lack of a decline means more people haven’t become discouraged and left the workforce, the lack of an increase means the situation isn’t getting any better.
2) Mixed Data on Long Term Unemployment
Those unemployed for more than 27 weeks saw a drop from 42.8% to 41.9% of all those unemployed. While this is an encouraging trend, those unemployed for 15-27 weeks saw an increase from 13.1% to 14.1% of the total.