This following graph should be concerning. We have government statistics (grey and red chart) and we have the real SGS Shadowstats statistics (blue chart). The key statistic to look at is that of the discouraged worker.
Let's go over the definitions first. A discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment. This is usually because an individual has given up looking or has had no success in finding a job, hence the term "discouraged".
This discouraged worker includes two categories: short-term discouraged (less than 1 year) and long-term discouraged (more than 1 year). The government statistics only show the short-term discouraged workers (U6). Why do you ask? Political considerations, to improve the statistics and this is especially true after year 2009 as we will see below.
Since 1994 Shadowstats has included long-term discouraged workers. Long-term discouraged workers are those people that are out of a job more than 1 year and I don't see a reason why they aren't counted in the statistics.
Official unemployment rate (U3) is 7.8% right now. Unemployment rate including short-term discouraged workers (U6) is 15%. The real unemployment though (SGS), is 23% (Chart 1). This SGS unemployment counts in the long-term discouraged workers upon the U6 number.
|Chart 1: SGS Unemployment Rate|
You can be sure of this, the economy isn't doing as well as it seems.
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