NOTE: In June 2013, the number of Real Unemployed Persons increased by 757,000 to 22.6 million and the Real Unemployment Rate increased by 0.4% to 14.3% (see below), reflecting large increases in the number of “marginally attached” and “part-time-of-necessity” workers.

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Summary of U.S. Real Unemployment – June 2013 (as of 7-05-13)

Friend,

The Bureau of Labor Statistics (BLS) announced on Friday morning that based on its monthly survey of “establishments” (or businesses), in June 2013 on a seasonally adjusted basis [attachment #1 hereto]:

• U.S. employers added 195,000 non-farm jobs versus the 160,000 that were expected per the monthly WSJ survey of economists.  This figure compares to May’s upward adjusted increase of 195,000 non-farm jobs (previously 175,000) and to April’s upward adjusted increase of 199,000 (previously 149,000).

Ø June’s non-farm jobs figure includes 202,000 more private sector jobs less 7,000 fewer government jobs.  The professional and business services sector increased by 53,000 jobs; health care & social assistance increased by 24,000 jobs; leisure & hospitality increased by 75,000 jobs; and construction increased by 13,000 jobs.  Employment in the all-important manufacturing sector, however, decreased by 6,000 jobs.

• The official BLS unemployment rate was unchanged from May at 7.6%.

Based on BLS’s separate monthly survey of “households”, there are now 11.8 million unemployed persons.

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However, as we note each month, BLS’s figures do not at all reflect Real Unemployment, since as a core principle BLS counts only those persons who are actively looking for employment.  Specifically:

1. BLS does not include among unemployed persons (i.e., the ‘numerator’) the 10.8 million workers in total who are either “marginally attached” or “part-time-of-necessity.” 

a. Marginally attached workers, of whom there are now 2.6 million, are workers who, “while wanting and available for jobs, have not searched for work in the past four weeks but have searched for work in the past twelve months.”  Currently included among them are 1.0 million “discouraged workers” who did not look for work specifically because “they believe there are no jobs available or none for which they would qualify.”

b. Part-time-of-necessity workers, of whom there are now 8.2 million, are workers unable to find full-time jobs or who’ve had their hours cut back.  These workers are often referred to as the “underemployed”.  

2. BLS does not include in the civilian labor force (i.e., the ‘denominator’) marginally attached workers (although it does include part-time-of-necessity workers).

In contrast, our Summary of U.S. Real Unemployment [attachment #2] makes these adjustments in order to determine both the number of Real Unemployed Persons and the Real Unemployment Rate.  In June 2013:

Ø The number of Real Unemployed Persons increased by 757,000 to 22.6 million (i.e., the 11.8 mm unemployed persons BLS identified plus the 10.8 mm workers combined who are either marginally attached (both “discouraged” and “other”) or part-time-of-necessity), specifically as follows:

	MAY '13	JUNE '13	Variance
BLS unemployed persons	11.760	11.777	0.017
Discouraged workers	0.780	1.027	0.247
Other marginally attached workers	1.384	1.555	0.171
Part-time-of-necessity workers	7.904	8.226	0.322
Real Unemployed Persons	21.828	22.585	0.757

Ø The Real Unemployment Rate increased by 0.4% to 14.3%.

Note #1: The number of Real Unemployed Persons has declined by 3.9 million since February 2010 when this number was at its highest at 26.5 million.  However, since the adjusted civilian labor force is now 2.2 million persons larger, in essence there has been an overall jobs improvement of 6.1 million workers, which achievement is often overlooked. 

Note #2: In addition to the total 22.6 million Real Unemployed Persons at June 30, there were another 4.6 million persons who, while also saying they want jobs, have not, however, looked for work in the past twelve months.  Because they haven’t looked, these persons are not included in the marginally attached workers category; if they are included, June’s Real Unemployment Rate of 14.3% increases to 16._%.

All my best.

Kind regards,

Leo Hindery