Unemployment Rises As Austerity Kicks In

The economy created 175,000 new jobs last month, and combined with the number returning to work (or getting increased hours), that means 319,000 more people were working full-time in May than in April. On the surface, that might be seen as good news by some. But the truth is that the official unemployment rate actually grew by 0.1% last month (from 7.5% in April to 7.6% in May).

That is because the number of unemployed people actually rose by 101,000 in May -- as 420,000 new people joined the civilian workforce (from 155,238,000 in April to 155,658,000 in May). That is about twice the number of new entrants to the workforce in a normal month, and is probably spurred by two factors -- the graduation of many from high school & college, and the austerity measures (commonly known as the sequester cuts) kicking in. Austerity is starting to take a lot of money out of the economy -- and less money flowing through the economy translates into less demand for goods/services, which means there is less (or no) need for new workers (and may soon start to affect those with current jobs).

In addition, there are still 7,904,000 people working part-time because their hours have been decreased or they simply can't find full-time work. And there are 2,164,000 people classified as "marginally-attached" to the workforce (who were not counted as unemployed by the government because they hadn't looked for work in the last four weeks). These people are starting to give up on the possibility of finding a job, but they are still unemployed and would like to work full-time.

Here is the official unemployment rate breakdown for the various demographic groups -- with the rate in May given first, and the rate for April being in parentheses:
General public...............7.6% (7.5%).....up 0.1%
Adult men...............7.2% (7.1%).....up 0.1%
Adult women...............6.5% (6.7%).....down 0.2%
Teenagers...............24.5% (24.1%).....up 0.4%
Whites...............6.7% (6.7%).....same
Blacks...............13.5% (13.2%).....up 0.3%
Hispanics...............9.1% (9.0%).....up 0.1%
Asians...............4.3% (5.1%).....down 0.8%

Here are the important figures for May.

Size of the civilian workforce:

155,658,000

Number of unemployed counted officially by the government:

11,760,000

Official unemployment rate:

7.6%

Number of "marginally-attached" workers (unemployed, but not counted by government -- probably an undercount):

2,164,000

Real number of unemployed workers (official count + "marginally-attached):

13,924,000

Real unemployment rate:

8.95%

Number of unemployed/underemployed (unemployed + part-time):

21,828,000

Unemployed/underemployed rate:

14.02%

That 14.02% is the real number that we should be worried about. That's the percentage of workers who would like to work full-time, but still cannot find a full-time job in the poor economy. Unless we abandon the austerity being forced on us by the congressional Republicans, I believe that number will just get worse.