Charting Stocks

Fridays employment report was widely reported as the figure came in much weaker than expected. The street was expecting a decline of 150,000 non-farm payrolls for the month of September while the actual figure was 263,000. The official unemployment rate was pushed up by 0.01% to 9.8%. Though the unemployment rate only ticked up by 0.01%, the household survey showed a steep decline of 785,000.

The official unemployment rate would have ticked  higher had it not been for a slight data adjustment. The BLS reduced the size of the Labor Force by 571,000. Most of those 571,000 are actually unemployed workers but because they “Gave up” on looking for a job, they were not counted in the calculation. Remember that the official unemployment rate is calculated as follows:

Luckily, the Bureau also releases figures which add back  “Discouraged Workers. That figure rose to 10.2%. Better still is their “U-6″ measure of unemployment which adds back discouraged and underemployed (those who can only find  part time jobs) workers. That measure of unemployment rose to an eye popping 17%!

Further, The Bureau of Labor Statistics (BLS) indicated that their preliminary assessment of the annual benchmark revision pointed to a sizable downward adjustment of 824,000 (0.6%) jobs lost for the year.  In other words, the official understated numbers were even greatly understated this year. The final figures for 2009 won’t be released until February.

Related posts:

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2. Unemployment Jumps to 8.1%; 25 Year High
3. Tech Layoffs Jump 75% in 2008
4. Unemployment jumps to 7.6%
5. Interactive Chart Unemployment Insurance Claims