Thursday, April 2, 2009

Estimating Total Unemployment

How bad is the labor market? Last week we saw how bad the numbers were for Oregon (10.8%) but that number only includes people who are actively looking for work.

Here is a quick look at where we are compared to the nation.

To get a better idea of the true unemployment rate we need to consider marginally attached workers, discouraged workers, and part-time for economic reasons workers. This is referred to as U-6 unemployment.

The Oregon Employment Department doesn’t release U-6 figures but we can estimate the current rate based on past rates.

The green table below shows Oregon’s ‘Headline’ unemployment rate (U-3) and the true unemployment rate (U-6) for 2007 and 2008.

The blue table shows the nation’s unemployment rates for the two most recent months.

Both sets of numbers have similar relationships and if we apply the most conservative ratio to the current Oregon ‘Headline’ unemployment rate we can estimate the current U-6 rate.

This is only an estimate, and a quick one at that.