We spend a lot of time going over economic statistics. Opening up a new economic report is rather like tearing through wrapping paper for me and my fellow data nerds (you know who you are). Some of the more important data reports we follow focus on labor markets.
The chart shows the aggregate unemployment rate for the six states in the Atlanta Fed’s region, as well as a broader measure of labor force underutilization—the so-called U6 measure calculated by the U.S. Bureau of Labor Statistics (BLS). The U6 rate consists of several groups: total unemployed, plus all marginally attached workers, plus total employed part-time for economic reasons, along with all marginally attached workers. The BLS provides U6 rates for individual states on a quarterly basis beginning in 2009, and annually from 2003. The chart begins in 2007, so the first two years only show annual calculations. I computed a U6 rate for the region by weighting the six individual states’ U6 rates by each state’s respective labor force.
The chart shows that the region’s unemployment rate stood just below 8 percent at the end of 2012, while the broader underemployment rate was just under 15 percent. These rates have come down from their recession peaks, but they remain well above prerecession levels.
Speaking of levels, and making these percentages more real, I also looked at how many people these percentages reflect. A regional unemployment rate translates into 1.8 million people, while the U6 regional measure represents a staggering 3.4 million.
Digging into these data is an essential part of the overall analysis because the exercise serves to remind me that there’s a lot that goes unseen behind the headline numbers.
Along those lines, Federal Reserve Vice Chair Janet Yellen’s recent remarks on unemployment struck a chord with me and my colleagues:
These [unemployment data] are not just statistics to me. We know that long-term unemployment is devastating to workers and their families. Longer spells of unemployment raise the risk of homelessness and have been a factor contributing to the foreclosure crisis. When you're unemployed for six months or a year, it is hard to qualify for a lease, so even the option of relocating to find a job is often off the table. The toll is simply terrible on the mental and physical health of workers, on their marriages, and on their children.
Speaking a day after Vice Chair Yellen, Atlanta Fed President Dennis Lockhart said:
There's an ongoing debate about the extent to which the causes of weak labor markets are structural or cyclical. The cyclical view maintains that the problem is just a deficit of aggregate demand and, with a quicker pace of growth, much of the problem will be solved. A sense of urgency is appropriate for this goal. If policymakers are too patient, what started as cyclical problems can evolve into structural problems. I think faster growth would indeed improve employment conditions significantly...
The “sense of urgency” that President Lockhart expressed is exactly what I feel when I look at the charts above. And to echo Vice Chair Yellen: these are not just statistics to me or my colleagues here at the Atlanta Fed.
By Michael Chriszt, vice president and community affairs officer in the Atlanta Fed's Public Affairs department