Ok, yesterday I wrote a quick post suggesting that CNBC reported the new unemployment rate (7.2) and December job losses (524,000) in an irresponsible, perhaps even outright manipulative fashion. The frame they used to convey the data was 'the numbers are not as bad as they could have been.' I argued this was not objective reporting, but subjective evaluation, given with little or no evidence that the important subjects (traders, investors, consumers, employers) actually thought this way.
Here's another problem with media representation of new job/unemployment numbers, though this is a general problem not specific solely to CNBC. In short, we need to stop talking about the unemployment rate as if it alone gives us the data we need to make sense of reality. The offical unemployment rate is actually a quite narrow statistic. It tells us something about how many people have been laid off and are now actively looking for employment. To get a fuller picture, this number should be combined with what the government calls 'U-6' -- which represents "total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers."
The official rate (the narrower number) has risen from 4.8 percent in December of 2007 to 7.2 percent in December of 2008. One in every 14 of us is completely unemployed and actively looking for work through agencies or receving unemployment insurance.
The U-6 rate has risen from 8.7 percent last December to a rate of 13.5 percent this December. The economy, that is, is under-performing for one in every 7.5 of us. Put another way, one in every 7.5 of us is under-employed -- part-time but wanting to be full-time, unemployed and looking for a job, or unemployed and not looking for a job.
In sum, if we want the truths we tell ourselves about ourselves to match the reality that we find ourselves up against, the offical unemployment rate is not good enough. There are broader data-points that we can, and should, be using to fill in important holes.