Bob Marshall’s BLS Analysis; 9/3/10
The unemployment rate is published by the Bureau of Labor Statistics, a division of the US Department of Labor. The rate is found by dividing the number of unemployed by the total civilian labor force. On September 3, 2010, the BLS published the most recent unemployment rate for August, 2010 of 9.6% (actually it is 9.642%; up .135% from 9.507% in July, 2010). This was determined by dividing the unemployed of 14,860,000 (up from the month before by 261,000—since August, 2009 (one year ago), this number has decreased by 133,000) by the total civilian labor force of 154,110,000 (up by 550,000 from July 2010). Since August 2009, our total civilian labor force has shrunk by 316,000 people. On the surface, these new unemployment rates are scary, but let’s look a little deeper and consider some other numbers.
The unemployment rate includes all types of workers—construction workers, farmers, etc. We recruiters, on the other hand, mainly place management, professional and related types of workers. That unemployment rate in August was fixed at 5.1% (this rate is the highest it has been since the 5.2% rate of September 2009). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in August was fixed at 4.6% (this rate increased by .1% from July’s rate).
Now stay with me a little longer. This gets better. It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is. Without boring you any more than I have already, just let me add here that Milton Friedman (the renowned Nobel Prize-winning economist), is famous for the theory of the “natural rate of unemployment” (or the term he preferred, NAIRU, which is the acronym for Non-Accelerating Inflation Rate of Unemployment). This theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it. So, if applied to our main category of management, professional and related types of potential recruits, and/or our other main category of college-degreed potential recruits, we have no unemployment