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The Employment Situation is Worse than the Unemployment Rate Indicates

The headline unemployment rate of 5.2% significantly understates the current situation. 

Here is a table that shows the current number of unemployed and the unemployment rate (as of August 2021). 

Then I calculated the unemployment rate by including the number of people that have left the labor force since early 2020, and the expected growth in the labor force.

 
Unemployment
Rate
Unemployed
(000s)
Left
Labor
Force
(000s)
Expected
Labor
Force
Growth
(000s)
Adjusted
Unemployment
Rate

Feb-20
3.5%
5,717
0
0
3.5%

Mar-20
4.4%
7,185
-1,727
100
5.5%

Apr-20
14.8%
23,109
-7,970
200
19.0%

May-20
13.3%
20,975
-6,248
300
16.7%

Jun-20
11.1%
17,697
-4,651
400
13.8%

Jul-20
10.2%
16,308
-4,363
500
12.8%

Aug-20
8.4%
13,542
-3,630
600
10.8%

Sep-20
7.8%
12,535
-4,370
700
10.7%

Oct-20
6.9%
11,049
-3,730
800
9.4%

Nov-20
6.7%
10,728
-3,912
900
9.4%

Dec-20
6.7%
10,736
-3,881
1,000
9.4%

Jan-21
6.3%
10,130
-4,287
1,100
9.4%

Feb-21
6.2%
9,972
-4,237
1,200
9.3%

Mar-21
6.0%
9,710
-3,890
1,300
9.0%

Apr-21
6.1%
9,812
-3,460
1,400
8.8%

May-21
5.8%
9,316
-3,513
1,500
8.6%

Jun-21
5.9%
9,484
-3,362
1,600
8.7%

Jul-21
5.4%
8,702
-3,101
1,700
8.1%

Aug-21
5.2%
8,384
-2,911
1,800
7.9%

As the economy recovers, many of the people that left the labor force will probably return, and there will likely be more entrants into the labor force (although recent demographic data has been dismal).

It would be a mistake to just look at the headline unemployment rate to assess the current situation.

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