Vol. 73/No. 32      August 24, 2009

Without the adjustment, the unemployment rate would have risen slightly.

The New York Times called the latest figures the “most heartening employment report since last summer.” However, official statistics mask the reality working people face.

The official unemployment rate calculated by the BLS does not include “marginally attached” workers—those the government claims have looked for work in the past year but not in the past month. Last month the number of this category of workers rose to 2.28 million people, which is its highest level since 1994, when the BLS began keeping records of this figure.

The decline of one-tenth of a percent in the official unemployment rate is statistically insignificant given that the change in the rate is smaller than the margin of error associated with the survey. In addition, the BLS continues to analyze data after releasing initial estimates and has subsequently upped previous months’ unemployment figures three times already this year.

In an August 7 blog on the New York Times Web site, Floyd Norris, chief financial correspondent for the paper, analyzes some aspects of the latest official employment report. He points out that the recent data unexpectedly shows that the auto manufacturing industry officially added some 28,200 jobs last month. It turns out that these numbers are seasonally adjusted, meaning that the BLS adjusts the raw figures to account for anticipated ebbs or flows in the job market.

In the auto industry official statistics anticipate layoffs in the summer as a result of yearly plant shutdowns for retooling, making the official unemployment rate lower. Not considering seasonal adjustment, reports Norris, the auto industry last month in fact lost 8,600 jobs.

One of the most striking signs that the unemployment situation is far from on the rebound is that long-term unemployment is reaching unprecedented levels. As of last month, the number of people officially unemployed for 15 weeks or more was 7.88 million—up 74 percent since December and the highest figure ever recorded.

For the first time since Washington began recording these figures, in 1948, more than a third of the unemployed have been out of work for at least 27 weeks. It now takes an average of more than 25 weeks for an unemployed worker to find another job, up from less than 20 weeks as of the end of last year.

Unemployment benefits are running out for many of these jobless workers. According to projections by the National Employment Law Project, some half million unemployed will have exhausted their benefits by the end of September and that figure will rise to 1.5 million by the end of the year.

Despite these facts, some in Washington are already optimistic about an end to the capitalist depression. In an August 7 press conference, President Barack Obama said his administration has “rescued our economy from catastrophe.”  
 
 
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