Official Unemployment Rate Hits 8.9%. 'U6' Now at 15.8%

[Joanne98]

Employment losses slowed in April, according to the Bureau of Labor Statistics, with a decline of 539,000 jobs. That improvement, together with a rising stock market and other signs, has convinced many economists that recovery may come more quickly than was being predicted even a month ago. But such news won’t put many smiles on the faces of Americans who were laid off last month. Since December 2007, what is now the longest recession since the Great Depression has forced 5.7 million Americans out of work. That puts the official rate of unemployment - labeled U3 by the BLS - at 8.9%.

Of the 13.7 million people now officially unemployed, 27.2% have been out of work longer than six months, a record.

An alternative measure of unemployment, which the BLS calls U6, includes workers who have become so discouraged they’ve stopped looking for jobs as well as people forced to work part time because they cannot find full-time employment. That rate hit 15.8% in April.

The BLS revised upward job loss numbers for February, from 651,000 to 681,000, and for March, from 663,000 to 699,000.

The Labor Department reported Thursday that continuing jobless claims – that is, unemployment benefits drawn by workers in the week that ended April 24 - reached 6.35 million, another record. But new applications for jobless benefits were considerably lower than expected, prompting some economists to suggest that a peak may have been reached. Continuing claims have risen 14 consecutive weeks. According to the BLS, only about 36 percent of unemployed Americans received unemployment benefits.

State-by-state figures won’t be available until May 22.

For the fourth time in five months, enrollment in the food stamp program, now called the Supplemental Nutrition Assistance Program, exceeded the previous record. The government reported Thursday that 32.55 million people received food stamps at the latest count. The average monthly benefit is $112.82 per person. In his fiscal 2010 budget, President Obama seeks $60 billion for the food stamp program, a $6 billion increase over this year.

"Dr. Doom," economist Nouriel Roubini, who predicted much of the current crisis, thinks the economy is starting to heal, but he doesn’t see as many "glimmers of hope" as the general consensus of economists do. He believes recovery from a recession now entering its 17th month will be not be fast or smooth. And, while the consensus predicts a peak of around 10% unemployment before the jobless rate starts declining, Roubini expects that it may hit 12%, well beyond the 10.8% peak of the 1981-82 recession. That would make it the worst unemployment situation since the 1930s.

In testimony before Congress Tuesday, Federal Reserve Chair Ben Bernanke conceded:

Even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while, implying that the current slack in resource utilization will increase further. We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly. In particular, businesses are likely to be cautious about hiring, implying that the unemployment rate could remain high for a time, even after economic growth resumes.

In other words, even when net layoffs cease, job creation will be slow at best, and no quick rehiring will take place. If you look at the recession of 2001 from the perspective of economic growth, it lasted only eight months, March to November. But the recovery that followed was for more than three years a jobless one. During the year after the recovery began, 562,000 net jobs were cut, and in the year after that, another 193,000 net jobs were lost. Indeed, the BLS payroll survey's pre-recession job numbers were not surpassed until February 2005. During the remaining years of George Bush’s two terms, the official unemployment rate never returned to the 4.2% where it stood when Bill Clinton turned over the White House keys.

So, lots of jobs, including the best high-paying ones, are not likely to reappear for years, especially in key sectors – manufacturing, particularly automobiles, as well as housing and financial services. And if getting back to work wasn’t going to be tough enough in this Great Recession, many people lucky enough to get rehired at their old job or find a new one, will be working for lower pay and reduced benefits. Workers in their late 40s or older may find it impossible to fully recover the income they have lost even if they put off retirement.

::
http://www.dailykos.com/storyonly/2009/5/8/729136/-Official-Unemployment-Rate-Hits-8.9.-U6-Now-at-15.8

[liberal N proud]

1. 15.8% is closer to the real unemployment rate

[Baby Snooks]

2. Much higher than even that...

The unemployment figures only include those who are currently applying for or receiving unemployment benefits.

And not all who apply will get the benefits. And some don't even apply since they don't qualify. The "hidden" unemployed. The self-employed and contract workers who don't quality because they're not really employed to begin with. And some who are really employed have seen their hours cut under the guise of "cost-cutting" when in fact the employer wanted to limit their hours so they wouldn't qualify for unemployment.

The real measure is those who had an income two years ago and don't have an income two years later. That figure is probably 25% or more.

And yet the other day the administration announced things are getting better. The recession is ending? For some perhaps.

The rich are getting richer. Everyone else is headed for the freeway underpasses.