August unemployment data from the Bureau of Labor Statistics shows that a significant portion of working-age U.S. adults are unemployed or only employed part-time. In addition to a 0.3-percentage point jump in the official unemployment rate, other factors such as civilian labor force participation rate and employment-population ratio also indicate that jobs remain difficult to find in the current economy.
The August 2009 unemployment rate, which reflects unemployed persons actively looking for work, rose from 9.4% to 9.7%. This follows a slight decline from 9.5% to 9.4% between June and July 2009. The unemployment rate stood at 4.9% when the recession began in December 2007. During the month, total nonfarm payroll employment fell by 216,000, and the total number of unemployed persons rose from about 14.43 million to 14.9 million. In December 2007, about 7.3 million Americans were classified as unemployed.
A look beyond these numbers shows that in actuality, many more Americans are unable to find work than those counted in the official unemployment figure. The civilian labor force participation rate, which is the proportion of the non-institutionalized civilian population age 16 and older serving in the labor force, remained flat at 65.5%. This figure stood at 66% in December 2007. The employment-population ratio, which measures the ratio of employed persons to the total non-institutionalized civilian population age 16 and older, dropped from 59.4% to 59.2%, and stood at 62.7% in December 2007.
Several other pieces of unemployment data also show continuing problems with the U.S. job situation. These include:
The number of employed persons working part-time for economic reasons remained essentially unchanged at 9.1 million and has held fairly steady since March 2009 after going through sharp increases in fall and winter 2008.
About 2.3 million persons were marginally attached to the labor force in August 2009, an increase of 630,000, or about 38%, since August 2008. These individuals were not in the labor force, wanted to work and had looked for work sometime in the prior 12 months, but were not counted as unemployed because they had not looked for work in the prior four weeks.
Among the marginally attached, 758,000 persons, or about 33%, were discouraged workers not currently looking for work because they feel no jobs are available. This number has increased by almost 100%, or a little under 380,000 individuals, since August 2008.
In what may be a good sign for the retail sector, retail trade employment remained basically unchanged in August 2009, although retail lost 44,000 jobs in July 2009 and lost an average of 27,000 jobs a month from April to June 2009.
Outside of job data, other economic indicators also provide a stagnant to negative picture of the health of the U.S. consumer. For example, in July 2009, U.S. consumers increased personal income by less than 0.1%, while decreasing disposable personal income less than 0.1% and increasing spending by 0.2%. Standing out against these fractional changes was a significant 5.6% dip in personal saving that could indicate increased willingness to spend money. However, retail sales decreased 0.1% in July 2009.
U.S. consumer credit and borrowing rates decreased in June 2009, and the consumer credit rate also decreased in Q2 2009. While this suggests a possibly healthier economic situation for consumers, it also indicates that consumers are cutting back on spending and may reflect consumers having access to credit and loans denied or limited.
In additional negative government data releases, the U.S. trade deficit rose 4% in June 2009, and the GDP (Gross Domestic Product) shrank 1.2% in Q2 2009.
Some private data indexes also cast a negative light on overall consumer health. The RPI (Restaurant Performance Index) rose 0.3 percentage points in July 2009, but still remained below 100, indicating contraction in key industry indicators. And the new Consumer Reports Index indicated lower levels of financial security and spending and higher levels of stress and unemployment among U.S. consumers in August 2009.
However, in one bright spot, the August Consumer Confidence Index regained some lost ground after dropping for two straight months, driven primarily by gains in the forward-looking Expectations Index.
