U-6 report..grim

[BurfordTJustice]

'Real' Unemployment Rate Shows Far More Jobless

While the national unemployment rate paints a grim picture, a look at
individual states and their so-called real jobless rates becomes even more
troubling.



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The government's most widely publicized unemployment rate measures only
those who are out of a job and currently looking for work. It does not count
discouraged potential employees who have quit looking, nor those who are
underemployed - wanting to work full-time but forced to work part-time.

For that count, the government releases a separate number called the "U-6,"
which provides a more complete tally of how many people really are out of
work.

The numbers in some cases are startling.

Consider: Nevada's U-6 rate is 22.1 percent, up from just 7.6 percent in
2007. Economically troubled California has a 20.3 percent real rate, while
Rhode Island is at 18.3 percent, more than double its 8.3 percent rate in
2007.


Those numbers compare especially unfavorably to the national rate, high in
itself at 14.9 percent though off its record peak of 17.2 percent in October
2009.

Only three states - Nebraska (9.1 percent), South Dakota (8.6 percent) and
North Dakota (6.1 percent) - have U-6 rates under 10 percent, according to
research from RBC Capital Markets.

Election battleground states paint a picture not much more flattering.
Florida's U-6 number is an ugly 17 percent, though Pennsylvania and Ohio are
both around 14 percent, below the national U-6 average.

The numbers come as the government prepares to release its latest reading,
the July nonfarm payrolls number, on Friday. Economists expect the report
show about 100,000 jobs created for the month and the traditional "U-3" rate
to hold steady at 8.2 percent.



"The lack of improvement in state U-6 rates continues to be troubling,"
Chris Mauro, head of US Municipals Strategy at RBC, said in a research note.
"While down from recent peaks, state U-6 levels remain dramatically higher
than they were in 2007 and 2008."

Mauro used the numbers to demonstrate that investing in municipal bonds
remains a challenge because high real unemployment rates will be a drain on
local finances.

"We remain concerned about the corrosive influence that these stubbornly
high U-6 rates may have on both consumer sentiment and state and local tax
revenues," he said. "At current levels, these U-6 rates will continue to be
a drag on credit quality."