The weight of unemployment
The number jumping out at me from this morning’s employment report is 6.9 million: the total decline in employed people since December 2007. The macroeconomic effects of that kind of change are huge: if each person ends up spending $20,000 less a year on average, that adds up to $138 billion in lost economic activity.
Over 10% of US males, and over 15% of US blacks, are now unemployed — and those are percentages of people who aren’t so demoralized that they’ve simply stopped looking for work altogether. Then there’s the “marginally attached” — here’s the Labor Department’s press release on the official “discouraged workers”.
About 2.3 million persons were marginally attached to the labor force in August, reflecting an increase of 630,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, the number of discouraged workers in August (758,000) has nearly doubled over the past 12 months. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.
The U6 measure of broad underemployment spiked up from 16.3% to 16.8% — yet another all-time high. I’m well aware that these figures are a lagging indicator, but the absolute levels alone should be more than enough to depress anybody looking for any sign that the US economy is looking remotely healthy. Markets, of course, are still high, and can always go higher. But the fundamentals look much less pretty.