It’s Not Unemployment It’s Underemployment We Should Be Concerned About
With the release of the job report by the labor department on Friday, everyone was pleased to see that the economy had another good month and that many more jobs were created. Unfortunately, there was also a big jump in underemployment, which includes discouraged workers who have fallen off the unemployment “radar” and underemployed, which includes those working part-time or those who are significantly underpaid given their education and previous salary base. The rate known as the U-6 jumped from 13.8% in May to 14.3% in June. This shows us that the 195,000 new jobs created were not high quality long-term career positions.
What Does The Public Say About Underemployment?
The government numbers are one set of data, but in a recent Gallup poll showing the monthly labor count, the underemployment situation may be significantly worse than what was originally realized. Currently, 17.2% of the work force is underemployed, which is much higher than the government data indicating only 14.3% are underemployed. Additionally, the government numbers indicate that there was a jump from 28.5% to 29.3% of those working part-time due to economic reasons, and a surge 1.027 million discouraged workers here in the U.S. who have stopped looking for employment.
What’s The Significance Of Underemployment On The Economy?
The underemployment numbers, although not reflected in the unemployment reports, may pose greater bearing on the economy than you think. For those concerned about when economic stimulus may end, the underemployment data may keep things in motion by the Fed for quite some kind. Additionally, we may not see the economy come back to full operating speed until adequate employment picks up, enabling people to have more expendable income, which in turn boosts the economy.
For more information on how underemployment impacts the economy as a whole, which in turn has a bearing on your personal investments, speak to a Redhawk Wealth Advisor near you today.