Jobs Numbers Get Worse

The January jobs number released by the Department of Labor on Friday were the worse than in any month in the currently available data set provided by the Department of Labor, which began in 1975. In January, 598,000 jobs were lost. This pushes the total lost during the last year to 3,500,000. The current employment level (percentage of the civilian noninstitutional population that are currently employed) stands at 65.5%, which is the lowest level since 1987 during the last years of the Regan administration.

The official unemployment rate reached 7.6%, the worst since the last year of the Presidency of George H. W. Bush. However, this number does not reflect the true percentage of people who would like to work but are unable to find a job. In a recent post, I formulated a measure of that I call the Adjusted Unemployment Rate. This value stands at 10.1%, the worst since the third year of the Reagan Presidency. The difference between the official unemployment rate and this adjusted figure has reached 2.5%, the highest in more than 40 years. This difference reflects, to some degree, the extent to which workers have become frustrated and have stopped looking for work.

In combination with recent jobless claims data, these data continue to indicate a deepening recession and the worse economic situation in at least 25 years and probably since the Great Depression.