markets

Unemployment Rate: 18.9%

The April jobs report say the unemployment rate is 14.7%. It’s the highest since the great depression. The Actual unemployment rate is 18.9%. (It’s actually way higher now.)

Why the difference? This graph explains the story.

Participation and Employment Levels of the Working Age (16-65) Population

We actually lost 25 million jobs last month. The reason the unemployment rate isn’t higher is because 8 million people dropped out of the labor force.

If we kept those people in the labor force, the unemployment rate would be 18.9%. Even with the 14.7% number, that’s the highest unemployment since the Great Depression.

Reported Unemployment Rate

Note that the jobs report is based on data halfway through the month. Since this report, we’ve lose another 12 million jobs, so the actual unemployment rate is closing in on 25% now.

By Christopher Schwarz, ago

Claims Relatively Low, Absolutely Ridiculously High

New Jobless claims were “only” 3.17 million today. That sounds great because it’s half the number 5 weeks ago. Of course, it’s **5** times the maximum number before this recession started.

In total now, there have been 33 million claims in 7 weeks. It took almost 75 weeks – 10 times longer – to hit the number of claims during the last two recessions.

Total Jobless Claims from the start of each recession

The question is now how long until claims slow down to “normal” levels and employment begins to increase again.

By Christopher Schwarz, ago