Unemployment Rate May Be Higher Than Thought

   

Posted: Mar 20, 2009

A recent report suggests that the current nationwide unemployment rate is actually somewhat higher than many people may think.

According to the Center for Economic and Policy Research (CEPR), today's unemployment rate is actually comparable to the 9.7 percent that was reached during the recession of 1982, which marked the worst year for employment since the World War II era.

"February's unemployment rate of 8.1 percent is bad news, but the unemployment picture is even worse than it looks," John Schmitt of the CEPR said in a statement.

When factoring in various statistical and demographic differences between the early 1980s and the current recession, the organization maintains that the current U.S. unemployment rate is actually closer to 9.7 percent.

With higher unemployment rates, consumer credit default rates may also continue to rise in the coming months.

In arriving at their conclusions, the report's authors pointed out that the current U.S. population is much older on average than it was 25 years ago, which would normally be a factor that lowers the unemployment rate. The authors also note that current surveys by the government and private sector are missing a larger share of the population than in the past, further skewing the numbers.