The real unemployment rate – September

Part 1 - The real unemployment rate – September  

Bottom Line: It's always that case that there's a lot more to a monthly employment picture than the jobs added or lost and base reported unemployment rate. There were all kinds of goodies to unpack from Friday's report. Here are some keys in the report from August...   

  • Headline unemployment rate 3.9% (flat vs last month & down from 4.4% year over year)     
  • 201,000 jobs added in August 
  • Revisions totaling a negative 50,000 jobs rolled in from prior months (after every month had been revised higher for the year previously) 

Top industries for hiring:          

  • #1 Professional and business services +53,000          
  • #2 Healthcare +33,000 
  • #3 Construction +23,000  

Now for the real unemployment rate once underemployed and long-term unemployed people are accounted for:          

  • Actual: 7.4% down from 8.6% yoy  - lowest in 17+ years 

Other key takeaways:            

1. When the long-term unemployed & marginally employed are factored in - the real unemployment is still nearly double the base reported rate     

2. The forgotten folks include 1.3 million are long-term unemployed, 4.4 million are underemployed & 1.4 million are marginally attached to the workforce. 400,000 net improvement during the month! 

3. The labor participation rate declined to 62.7%  

The negative revisions from prior months and the labor participation rate dipping were less than ideal but otherwise there’s a lot to like. Especially with the real unemployment rate hitting 17+ year lows.   

In part two we'll look at the demographics of the unemployed...       

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