MO: Jobless numbers down, but which figure should you cite?

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By Johnny Kampis | Missouri Watchdog
— Unemployment figures in Missouri and the nation are either greatly improving or terribly misleading, depending on whom you believe.

The latest Bureau of Labor Statistics numbers show the jobless rate in the Show Me State in September at 6.9 percent, the lowest it has been since November 2008.

This ties Missouri for the 19th lowest unemployment rate in the United States.

Perhaps more importantly for President Barack Obama’s re-election chances, BLS says the nationwide unemployment rate has dropped from 8.1 percent to 7.8 percent.

That figure is key because Obama pledged that his stimulus spending would reduce the jobless rate below 8 percent. Republicans have questioned the accuracy of that report, released in the weeks before the election.

Many conservatives instead point to what is known as the U-6 rate, which includes those who have stopped looking for work — what BLS calls “discouraged workers” — as well as “involuntary part-time workers” who get less than 35 hours per week but want more.

Factor these categories into the unemployment rate, and the latest number is 14.7 percent, or nearly double the official total.

University of Missouri economics professor Peter Mueser said which number is cited tends to vary by political persuasion and who controls the White House.

“If you want to say things are bad, you’ll cite the higher number,” he said.

The U.S. Labor Department created the various unemployment metrics to give a better view of the country’s economic situation. The U-3 rate, which is considered the standard measurement, counts the unemployed as a percentage of the civilian labor force — but only tracks those actively seeking work.

U-1 only counts those who have been unemployed at least 15 weeks, while U-2 factors in temporary workers. U-4 and U-5 consider some of the factors that go into the U-6 rate, such as discouraged workers.

Mueser said all of the rates move up or down in the same direction depending on the state of the economy.

“There’s no true, correct measure,” he said. “You can see which people are counted in each rate, so you can judge for yourself which is a better measure.”

Missouri’s average U-6 rate from the third quarter of 2011 to the second quarter of 2012 was 13.2 percent, while its oft-quoted unemployment — or U-3 — rate was 7.5 percent for that period.

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