The Real Unemployment Rate – November

Part 1 - The real unemployment rate – November 

Bottom Line: It's always that case that there's a lot more to a monthly employment picture than the jobs added or lost and base reported unemployment rate. There were all kinds of goodies to unpack from Friday's report heading into Election Day. Here are some keys in the report from October...     

  • Headline unemployment rate remained 3.7% - lowest since 1969!  
  • 250,000 jobs added in October  
  • No net change based on revisions – so it’s a clean 250k gain  

Top industries for hiring:            

  • #1 Leisure and Hospitality         
  • #2 Healthcare   
  • #3 Manufacturing 

It’s incredible that manufacturing added another 32k jobs for the month. Additionally, it’s clear based on the breadth of gains that these aren’t just lower paying seasonal jobs. There’s an extremely impressive story about growth going on here.  

Now for the real unemployment rate once underemployed and long-term unemployed people are accounted for:            

  • Actual: 7.4% down from 8% year over year  - lowest since April of 2001.

Other key takeaways:              

1. When the long-term unemployed and marginally employed are factored in, the real unemployment is exactly double the base rate.  

2. The forgotten folks include 1.4 million are long-term unemployed, 4.6 million are underemployed and 1.5 million are marginally attached to the workforce.  

3. The labor participation rate improved to 62.9%.    

Good news everywhere you look here. The lowest base unemployment rate in 49 years and the lowest real unemployment rate in over 17 years. Improved labor participation rate. Pretty great and we’re just getting started.  In part two we'll look at the demographics of the unemployed.

Photo by: Joe Raedle/Getty Images

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