Attestation Update – A&A for CPAs

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Unemployment rate declines again in August 2020 after sharp spike in April 2020.

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After shooting from 3.4% in February to 14.7% in April, the headline unemployment rate has dropped to 8.4% in August.

You will interpret the statistics as you wish.

Looks to me like people are slowing getting back to work after the shock of the pandemic and follow-on government-ordered shutdown of the economy.

There are six different measures of unemployment, each providing a slightly different perspective. Put them all together for a more complex picture the economy.

At the top is a graph since 2007 of U-3, the headline statistic, along with U-6, the broadest stat which includes discouraged workers, marginally attached, and those working part time because they can’t find full time work.

For a closer picture, focus in on the stats since January 2019:

 

Here are the raw numbers for U-1 through U-6:

measure Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jun 21 Jun 22
U-1   1.2     1.2      1.1      1.4      2.1      5.0      5.1
U-2   1.7     2.4    13.2    11.6      8.9      8.1      6.4
U-3   3.5     4.4    14.7    13.3    11.1    10.2      8.4
U-4   3.8     4.7    15.1    13.6    11.5    10.6      8.7
U-5   4.4     5.2    16.0    14.6    12.5    11.3      9.6
U-6   7.0     8.7    22.8    21.2    18.0    16.5    14.2

 

Notice the U-1, which is the long-term unemployed stat, rose 0.7% in June and then shot up another 2.9% in June.

Changes since April:

  • U-1 – up 4.0%
  • U-3 – down 6.3%
  • U-6 – down 8.6%

Explanation of the different stats:

measure description
U-1 U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
U-2 U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
U-3 U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
U-4 U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
U-5 U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force (i.e. marginally attached)
U-6 U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

 

Written by Jim Ulvog

September 4, 2020, 7:52 am at 7:52 am

Posted in Economics, Other stuff

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