The "Real" Unemployment Rate Jumps To 15.6%

Real Estate Broker/Owner

While all of the media points to an 8.5% unemployment rate in March according to the U-3 labor report data from the Bureau of Labor Statistics, the number you won't hear anybody talking about is the U-6 unemployment number which jumped from 14.8% to 15.6%.

The U-6 unemployment number includes three types of workers that are overlooked by the U-3 number:

1.)  Marginally attached workers - people that want a full time job, have looked for one in the past, but are no longer looking for work.

2.)  Discouraged workers - those that have given a job market reason for not looking for a job.

3.)  Persons employed part time for economic reasons - in other words, somebody that wants a full time job but has had to settle for part time work.

Two statistical differences worth pointing out between the U-3 and the U-6 numbers is that year over year, the U-6 number has increased by 71.4% comparedto the U-3 number which increased 66.7%.  So in other words, the U-6 number is rising at a greater percentage than the U-3 number, more workers are falling through the cracks.

The second point of difference between the two data sets is that in March of 2009 compared to March of 2008, 6.5 more people out of every 100 are unemployed according to the U-6 data compared to 3.4 more people for the U-3 data.  This is an alarming change in the course of just 12 months.

The reason these numbers are relevant to a housing recovery is that each month the number of Americans that are able to buy a home for the first time is contracting because fewer Americans have jobs.  Additionally, the number of Americans who may lose their home to a foreclosure because of a job loss is rising.  In order to make up for these demand and supply imbalances, investment real estate needs to be part of a housing recovery plan.




Comments (45)

Lori Nodine
Plymouth, CT


I agree with Mike Lewis.  I have felt all along that the unemployment numbers have not been representative of what's really going on.  Your information on the U-3 and U-6 numbers makes a lot of sense. There are so many more than that however that are not included in any of this reporting.  Lots of self-employed people are out of work or have significantly less of an income.  That includes REALTORS. Appraisers, Contractors, etc.  - we cannot collect unemployment  and do not fit into any of the U-3 or U-6 numbers. I'm still hanging in there and working the real estate market the best that I can in my area and remain optomistic that things will turn around.  Thanks for your blog.


Apr 04, 2009 10:19 AM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties
With almost 700K more in March and self employed people hard to track it can only get worse until it gets better.
Apr 04, 2009 11:03 AM
John Mulkey - Waleska, GA
Housing Guru

Mark, the sad part of the unemployment numbers is that most economists predict them to continue rising into next year. Even after the recession ends, unemployment can rise due to the lag time in hiring as the economy recovers.

Apr 04, 2009 12:18 PM
Chuck Mahoney

Hi, Mark,

Good article, but it is even worse than any of us know!  How many (millions?) folks are unemployed but unable to collect unemployment compensation because they are self-employed individuals who were not paying into the unemployment tax revenues!!???


Apr 04, 2009 01:03 PM
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Mark -- One only hears passing reference to other categories (U6) mentioned briefly on the air when it comes to unemployment and it never seems to garner any traction in the press.  I agree with you.

Apr 04, 2009 01:31 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale


I always learn something new from your posts. I'd never seen the U-6 stats but these are categories that make a lot of sense. Thanks.

Apr 04, 2009 01:57 PM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Last year I reached a low point with no $$$$$.  But I was not "unemployed" as I was self employed and have been most of my life.  God provided, but I was scared to death. Although things are going much better now I am still tight with a buck.  underemployment and fear have a big ripple effect on the economy.

The best thing we can do is fight for a government to get off our back.  GO TO A TEA PARTY!

Apr 04, 2009 03:39 PM
Mark MacKenzie
Phoenix, AZ

Patrick:  I agree with that. :)

Frank & Jodi:  That is the great thing about being a small business owner.

Jason:  Agreed.  It is interesting to me that this data is not more widely reported.

Phil:  Thanks for commenting.

Dan:  Unfortunately even areas that never had a boom are seeing a bust, places like Detroit are one of them.

Mike:  I have thought about this on my occassions.  There are plenty of people that still have a "job" vot whose income has declined this past year.

Apr 05, 2009 12:26 AM
Mark MacKenzie
Phoenix, AZ

Chuck:  This is a tricky topic.  I agree there are indeed always options, but for some people those options are getting a $10 hourly job after they have been laid off from their $100K a year job.  There are still jobs out there, but for a lot of people they won't be able to replace the job they lost in terms of earning potential.

Team Carroll:  I agree with you 100%.  We need to be realistic and have honest conversations with out clients.  The sky is not falling but we also can't ignore the forces that are working against us.

John:  Consider yourself blessed.  There are millions of Americans that are struggling right now through no fault of their own.  Bad things do happen to good people - even financially responsible people.  I hope you are not insinuating that I am whining as I would take offense to that.  I write about solutions, not complaints - there is a big difference.





Apr 05, 2009 12:35 AM
Mark MacKenzie
Phoenix, AZ

William:  You bring up some really good points in which I completely agree with.

Debra:  Things are indeed changing. :)

Lori:  These small business owners like agents, appraisers, etc, don't fall into this report as we are not employed or unemployed.  It is difficult to get a reading on how these business owners have been impacted in terms of their income, but I am sure it has not been positive for the majority.

Joe:  Agreed.  You try to identify a bottom with these things by following the month over month changes - we are not seeing a bottom in these numbers yet.

John Mulkey:  I have read about this as well.  Contrary to some of the comments, I am not complaining, just communicating why real estate is going to continue to face a head wind for a recovery and why investment real estate should be a part of a recovery plan.

Apr 05, 2009 12:43 AM
Mark MacKenzie
Phoenix, AZ

Chuck:  Agreed.  A couple of other people have commented about this too, this is not a small number.

Chris:  Thanks, I am still surprised as to how this number simply gets swept under the carpet.

Wayne:  Thank you very much, that means a lot.

Gene:  Thanks for sharing that information with us, and congratulations on sticking with this.  Tea Party indeed.

Apr 05, 2009 12:46 AM
Rick Fifer

Mark Twain's thought on statistics:

There are lies,

There are damn lies,

Then there are statisitics

The government has been blatantly cooking the books for both employment/unemployment and inflation since Nixon. Both Reagan and Clinton took it to new levels. 

I'm not drinking the kool-aid their serving.

Apr 05, 2009 01:00 AM
Rick Fifer
Vintage Homes Realty - Tampa, FL
Broker/Owner, Vintage Homes Realty

Mark Twain's thought on statistics:

There are lies,

There are damn lies,

Then there are statisitics

The government has been blatantly cooking the books for both employment/unemployment and inflation since Nixon. Both Reagan and Clinton took it to new levels. 

I'm not drinking the kool-aid their serving.

some how got logged out when commenting above

Apr 05, 2009 01:04 AM
Craig & Sue Guffin
Coldwell Banker Monsees Realty - Sedalia, MO
Sedalia Mo Real Estate

I continue to be amazed at how many IMPORTANT statistics are intentionally buried and not brought up as a real concern in our economic situations. Thanks Mark for your post. 

Apr 05, 2009 01:38 AM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks Mark.  Where do you think it will top off?

Apr 05, 2009 02:38 AM
Mark MacKenzie
Phoenix, AZ

Rick:  Thanks for the comment(s).  I agree and thanks for pointing out this is not a Democrat or Republican thing, this is a Washington thing.

Craig:  I agree, I don't think there is a more important statistic other than employment and for this type of information not to be widely disseminated is interesting.

Gabe:  That is a really good question that I don't have an answer to.  It looks like we still have a ways to go.  The actual monthly job losses are still rising month over month, that is never a good sign especially considering in just the past five months we have lost nearly 3 million jobs:

Mar:  663K

Feb:  651K

Jan:  598K

Dec:  524K

Nov:  533K

(Source: BLS)


Apr 05, 2009 04:13 AM
Stuart Dobson - Thornton, CO

Hi Mark,

I read a synopsis of this on MSN as well.  The way the government calculates unemployment is atrocious.  Just as bad the the calculation for 'inflation' and CPI.



Apr 05, 2009 05:41 AM
Esko Kiuru
Bethesda, MD


The recovery we all are looking for has battles to fight on many fronts. The key one involves rising unemployment that will keep more people from buying homes, or even doing refinance.

Apr 05, 2009 09:21 AM
Todd Clark
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Don't forget people that don't qualify for unemployment, basically anyone out of a job that receives a 1099 at the end of the year... Say mortgage brokers and real estate agents? I bet that number could even be higher!


Apr 05, 2009 08:00 PM
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Well no wonder the numbers are not being counted correctly - it's the government doing it.  Want it screwed up and skewed, they're the people for the job.  Let's also used a broken $3000 calculator you can get at Walmart for $5.

I agree with Todd on the 1099 folks also.  They are never considered.

Apr 08, 2009 05:13 AM