Truer unemployment rate rises to 16.8%

Don't be fooled by the fact that the official U.S. unemployment rate in February remained unchanged from January at 9.7 percent.

The truer measure of unemployment in the United States rose from 16.5 percent in January to 16.8 percent in February.

As I do every month when the new unemployment numbers come out, I'm going to unpack the data to give you a truer picture of joblessness.

It is true the official rate remained unchanged at 9.7 percent and the economy shed only 36,000 jobs last month. That's a lot better than this time last year, when the economy was hemorrhaging 700,000 jobs per month.

However.

As I've written before, the official unemployment rate is a narrow -- statistically legitimate -- but narrow measure of unemployment. It is based on a monthly rotating survey of 60,000 households plus data received from employers. In order to be counted in this number, you have to be a) out of work, and b) looking for work. That number tells us there are officially 14.9 million jobless Americans.

You are not included in the 9.7 percent rate if a) you would like to have a full-time job but can find only part-time work, and b) if you've grown so discouraged at finding work, you've simply given up.

If you include all of these people into the number -- all of the people who should be working full time but are not -- the truer U.S. unemployment rate is a much higher 16.8 percent.

But why did that number rise in February when the 9.7 percent number stayed the same?

Because the number of discouraged workers is rising and so is the number of part-time workers.

According to Bureau of Labor Statistics numbers out this morning, the number of part-time workers increased to 8.8 million in February, up from 8.3 million in January.

More troublesome, the number of discouraged out-of-work Americans continues to increase. In February, it stood at 1.2 million, up from 473,000 in February 2009.

I did a piece last summer that you can see by clicking here (it has a chart!) showing that one of the ways the Great Recession differed from previous recessions was the big and growing (and still growing) gap between the official unemployment rate and the truer rate. The gap between the two rates is actually greater now than it was when I first noted it, back in August, when it was then at its all-time high.

Bottom line: We can expect the official unemployment rate to hover near 10 percent at least through the rest of the year. I thought we'd seen a cap in the truer unemployment rate, but evidently I was wrong.

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