Unemployment Rises in Virginia and Maryland

WARNING upfront unless you you want to hopefully better understand what the unemployment number really means and what it doesn’t this may or may not be of interest to you but if you are curious by all means plow onward.

The currently touted “unemployment” number is one of the most intentional misleading statistics distributed by both government and media. The US Department of Labor’s Bureau of Labor Statistics actually provides six (6) alternative measures of labor underutilization on a monthly basis from the Current Population Survey (CPS) for the United States as a whole and on a state by state basis. All of this data is published in the Bureau of Labor Statistics’ monthly Employment Situation news release but typically ONLY the politically tuned “official” unemployment number (as measured in the CPS by U-3 in the U-1 to U-6 range of alternatives) ever sees the light of day. The U-3 number includes all jobless persons who are available to take a job and have actively sought work in the past FOUR (4) weeks ONLY, a very skewed representation of the true employment situation, especially when dealing with long term job loss and stagnation that we have seen throughout the Obama years. For example the six state jobless measurements available are:

U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;
U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;
U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);
U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; and
U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

The U-6 statistic is really the best indication of the real base long term employment trend but you will hardly ever see it mentioned. If you look at Virginia’s latest cumulative annual numbers for 2014 a more honest picture jumps right off the page. Using the Bureau’s above categories Virginia’s 2014 ratings were; U-1 (2.4%), U-2 (2.4%), U-3 (5.2%), U-4 (5.5%), U-5 (6.5%), and U-6 (10.4%).

People often ask each other – if things are improving (defined by the politicians touting the snapshot U-3 measurement) why don’t I seem to see it in my daily life (as gagued by the long term U-6 statistic)? The simple answer is that while the unemployment rate as measured by the U-3 is dropping, given the growing number of individuals out of the job market long term which it DOES NOT measure, the U-6 number is not showing significant improvement, but they never see or hear it reported. So you can go with a feel good number like the reported 5.2% “official” unemployment rate for Virginia in 2014, that is largely meaningless or face a reality you are rarely presented by looking up online the state’s U-6 data with its more acurarate representation at 10.4%.

Statistics bore you to death, that’s OK because there is fun to be had here by just asking one of the pontificating economic recovery blowhards if the opportunity arises either online or in person how the U-6 numbers are trending and if they support their recovery mantra. I guarantee you the stammering, blubbering and attempts at out of hand dismissal will quickly commence because their U-3 “unemployment number” is really just a political three card monte game.