[The Gorman Blog] Why Unemployment Seems Worse...

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The ADP Employment report was released today showing that private employers shed 254,000 jobs in September, worse than the -200,000 that was expected. The decline was the smallest since July of 2008, but still a troublesome number.

There are 150 million people in the workforce, and that number grows by about 1.5 million people per year - due to population growth. To keep pace with that, the US needs to create about 125,000 jobs a month. So, a loss of 200,000 jobs is actually means we are falling 325,000 jobs behind for just one month...which is enormous.

Now consider that nearly 10% of the work force is unemployed - that's 15 million people - a huge number of folks who are without jobs. If you haven't looked for work in four weeks, you are removed from the ranks of "officially unemployed" list. This brings the actual Unemployment rate to about 11%. If you consider those who have had to settle for part time work, because full-time positions were not available - it brings the real rate of unemployment to about 17%.

The market's positive spin when a lousy jobs number comes out, just because it beat expectations, is quite interesting considering historical numbers. During the past 20 years, the average growth rate has been 91,000 jobs per month - and the very best 10 years were from 1991 - 2000, when we averaged 150,000 per month.

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