Unemployment data were released today, showing the national rate to have reached 10.2% in October, its highest level since April of 1983.   This number is the Government’s headline unemployment number, which is formally referred to at U3.  There is another number that the Bureau of Labor Statistics puts out each month that has been a primary focus of the “double dip recession” crowd.  This number, referred to as U6, includes all of U3 plus individuals who have stopped looking for work as well as individuals working part time because they cannot find full time positions.  Investors that are skeptical of the sustainability of the U.S. recovery have looked to this number to show the true state of the American consumer.  When counting all the under-employed and discouraged workers in the U.S. economy, it is difficult to see the consumption piece of the economic puzzle making big strides in the coming months.  In October U6 reached 17.5%, a 0.5% increase.  Below is a chart of U3 and U6 since October of 2007 and a chart of month to month changes in non-farm job gains and loses over the same time period.

U3 and U6, October 2007 Through October 2009

Monthly Non-Farm Additions/Loses, October 2007 through October 2009

The October employment data was a bit worse then expected.  The headline unemployment rate was projected to come in at 9.9% and non-farm job losses were expected to be 175,000.  What we got was a headline unemployment rate of 10.2% and 190,000 jobs lost.  There’s alway November.

Garrett W. McIntyre

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