Real American Unemployment Rate

Via MR, FT Alphaville points to the work of economists at Nomura who have constructed an excellent graphic that highlights the real US unemployment rate. It stands at 10.3% compared to the official rate of 8.5%.

Much is being made out of the fact that the US unemployment rate has been falling in recent months. However, this conceals the fact that the declining rate is a statistical illusion. It excludes the large numbers who have stopped actively looking for work and have theoretically "left the labour force and therefore count as unemployed".



The biggest concern is this

But what is striking about the broken line above isn’t where it now ends — at 10.3% — but rather the lack of any meaningful, sustained improvement for more than two years. This alternative measure has remained above 10% since September 2009, and aside from a bit of skittishness (some of which is down to uncaptured seasonality) has mostly just moved sideways.