NEW YORK—Though much of an analysis by Merrill Lynch of the non-farm payroll numbers is fairly promising, some of the findings are disquieting. Others are even downright scary.
According to David Rosenberg, in an analysis released on Feb. 6, indicates that the actual unemployment rate, while normally higher than the official one by the Bureau of Labor Statistics, hit a level not seen since at least 1994.
Rosenberg found that inflation is not much of a threat as a result. However, he explains that what the official unemployment rate misses is the vast degree of “underemployment” as companies cut back on the hours that people who are still employed are working. Those hours have declined 1.2% in the past 12 months, according to Rosenberg.
The BLS still categorizes people as employed even if they are only on a part-time basis. The number of part-timers has ballooned nearly 70% in the past year as a result of deteriorating economic conditions, according to the study.
Perhaps most distressing, is that when the poor conditions for employment is taken into account, Rosenberg found that the ‘real’ unemployment rate has actually climbed to 13.9%, an all-time high for the period he studied, and up from 13.5% in December and 11.2% a year ago.
While there has been increased concern that the federal deficit might lead to inflation, Rosenberg says those worries are misplaced.
“With this amount of excess capacity in the jobs market, and keeping in mind that the inflation process is dominated by the direction of labor costs, it is tough to believe that inflation at this point is anything but a far-in-the-distance prospect,” Rosenberg wrote. “A present-day reality it is not.”