Meteor Blades reported today on the October jobs report from the Bureau of Labor and Statistics, showing an overall growth in the economy, strong enough to spur the Fed on to finally raise interest rates.
After reporting that September had generated the weakest job growth in 29 months, the Bureau of Labor Statistics estimated Friday that the economy generated 271,000 seasonally adjusted new jobs in October. That was 268,000 private-sector jobs and 3,000 public-sector jobs. This was far above the consensus of experts surveyed ahead of time. October thus became the 68th straight month that new private jobs and 61st month that new public jobs have been added to the U.S. economy. The official unemployment rate fell 0.1 to 5.0 percent.
Even though the official nominal unemployment rate is what most organizations focus on, there are other measures of unemployment which estimate higher rates of unemployment, depending on category. MB also reports on U6, the highest category measured by the BLS.
In addition to the official unemployment rate (which the BLS labels U3), another measure (known as U6) estimates both unemployment and underemployment. It includes people with no job at all, part-time workers who want a full-time job but can't find one, and many "discouraged" workers. U6 fell in October 0.2 percent to 9.8 percent. The number of people officially unemployed remained unchanged at 7.9 million.
U6 unemployment is now below 10%. The last time if was below 10% was
May of 2008.
If people want a measure of how well the Obama administration has shouldred the responsibility of the economic recovery, they should consider how U6 has fared.
When Obama took office in January 2009, U6 was at 14.2%. It is 9.8% as of October 2015, 4 pts lower. Compare that to GW Bush: U6 was at 7.3% in January of 2001, meaning U6 increased 6.9% under Bush.
I know that unemployment rate alone is not a complete measure of the strength of our economy, and in particular how average Americans are recovering; but I also think it is a good measure to look at.
I think in general, this is a significant achievement to bring U6 down to this level, and Democrats and the administration need to emphasize these markers to exemplify the great strides they have taken to improve our economy, especially in contrast to Republican rhetoric.
The discrepancy between the official unemployment rate, and other measures, notably gets exploited by people like Donald Trump, suggesting that this is part of some government conspiracy to make the economy outlook more favorable than it really is.
Of course, I do not completely deride such a claim. After all, to focus on U6 rather than the official U3, which is what I think more people should do, starts from a similar premise. It belies the notion that if the economy is really improving for the average, working-class American, than it will show up in these other categories. People who have been discouraged from looking for work, and people who are actually starting to seek out better jobs than they are at, for them to start showing up more, and more importantly, decreasing, is a major indicator of a stronger economy.
The implication by people like Trump is that a better official unemployment rate does not mean people are finding employment, but that they are going the other way, and being discouraged from finding work. If that were the case, though, they would still show up as U6. The fact that U6 is falling at about the same rate as the official U3 number, crushes that fallacious claim.
This is not a fact that people should be overlooking. Not only are people finding jobs, but even the people who are employed but want better jobs are coming back as well.
2016 is a major election year. The economy often weighs heavily on people's minds when they go to the polls. Rather than allowing Trump and his ilk to paint a gloomy picture, Dems on our side should be championing these signs of a stronger economy. On the whole, the Obama administration has been at the helm of a dramatic turnaround; another Democratic administration is more likely to continue these trends than another Republican one. The trend is going in the right direction, but what recent history has shown is that, with the wrong administration in office, these trends could so easily go awry.
The larger point we should always have foremost is that even though the economy has ostensibly recovered from the Great Recession, many average American workers are only just now starting to see signs of that recovery. Ultimately, any single sign like U6 is only that, just a sign; the ultimate arbiter is that the people themselves start to see better outcomes. Once they do, though, things like U6 can and should be utilized to just how different things are between Democratic and Republican policy.