Unemployment Rate

The unemployment rate number was released today, which stated that the unemployment rate stayed the same at 9.6% beating forecasts of 9.7%. This seems like great news, unfortunately this was the reported rate (or U3), the real unemployment rate or U6 actually increased from a prior 18.5% to 19.0%. That is a pretty big hike in unemployment. The markets regained most of its losses from pre-market after the release of the U3 number, but if they really peal back the report and look at U6 (which most don't), they will see this as a much worse problem).

The problem with U3 is that it only takes the reported labor force / unemployed, it does not consider the following; Marginally attached, Discouraged and part time for economic reasons workers. They all have to be included in the unemployment number as that truly reflects our unemployment number. The number of Marginally attached workers increased by 78,000, the number of workers that are part time for economic reasons expanded 612,000 and the number of discouraged workers increased 99,000 from the prior month.  That is huge and is not a victory by any stretch of the imagination.

The graph above represents the changes in Marginally Attached, Discouraged and Part Time for economic reasons month to month.