Funemployment! - Via Big Journalism, we discover via the mainstream media that a higher unemployment rate is
good news. Yay! Look, I get it: job creation is showing signs of life and encouraged workers are re-entering the fray to vie for the new jobs. The problem is that when unemployment was around 5-6% during the Bush administration, columnists like Paul Krugman never tired of writing weekly articles about how the number was artificially low because discouraged people had "dropped out" of the workforce.
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The problem with the argument that unemployment is rising because discouraged workers are reentering the workforce is that it is contradicted by the U6. The unemployment rate typically cited by the news media is the U3 figure -- those actively seeking work. That rose last month.
However, there is another unemployment figure in the report -- the U6. It adds the percentage of unemployed currently seeking work (the U3) to the percentage that are underemployed (those working part-time -- even if only 2 hours a week -- but seeking full-time work) and discouraged workers (those who are unemployed but not working because they do not feel they can find work, those taking retirement because they cannot find work and those taking disability because they cannot find work). That number also increased last month -- by a greater percentage than the U3.
Even though some discouraged workers reentered the the pool of people actively seeking work, still more were created. I'd say that's bad news.
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