On The Margin: Total Unemployment April 2011

Today’s Employment Situation report showed that in April “total unemployment” including all marginally attached workers increased to 15.9% while the traditionally reported unemployment rate increased to 9%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 05 2011

Today’s jobless claims report showed a stark jump to initial unemployment claims and an increase to continued unemployment claims as a notable rising trend continued to materialize for initial claims.

Seasonally adjusted “initial” unemployment increased by 43,000 to 474,000 claims from last week’s revised 431,000 claims while seasonally adjusted “continued” claims increased by 74,000 resulting in an “insured” unemployment rate of 3.0%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 4.12 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.78 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.90 million people on state and federal unemployment rolls.

ISM Non-Manufacturing Report on Business: April 2011

Today, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related economic activity pulled back notably throughout April.

At 53.7 the business activity index weakened dropping 10.05% since March and sliding 8.83% below the level seen a year earlier.

Like the ISM Manufacturing index released earlier this month, the non-manufacturing sector respondents are raising some concern over pricing pressures:

"Looking forward with reserved caution. Cost of goods by this fall are a big worry." (Accommodation & Food Services)

"Continuing economic uncertainty will curtail or delay project spending for the immediate future." (Educational Services)

"Fuel prices continue to be challenging and in addition to shipping, are influencing the cost of materials." (Public Administration)

"We are seeing price increases in many areas, and the lead times are stretching out. Our business activities are improving at a moderate rate." (Wholesale Trade)