UNDEREMPLOYMENT – UNITED STATES

Gary Morgan’s comment on October unemployment: Donald Trump’s victory in US Presidential race shows electors believe real unemployment is higher than official statistics suggest

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Original article by Gary Morgan, Roy Morgan Research
Market Research Update – Page: Online : 15-Nov-16

US President-elect Donald Trump consistently stated during his campaign that real unemployment in the US was well over 20% or even 25% rather than the official Bureau of Labor Statistics (BLS) U3 figure – now at 4.9% for October 2016. In May Trump stated: "We have tremendous deficits. Don’t believe the 5 per cent. The real [unemployment] number is 20 per cent. The United States is dying from within, its domestic infrastructure is crumbling and successive administrations have wasted $5 trillion in the Middle East instead of using the money to create jobs and prosperity at home." Trump’s successful candidacy shows that many Americans agree with the new President that the official unemployment figures are considerably under-stated. There is a clear lesson for Australian politicians in Trump’s success.

CORPORATES
ROY MORGAN RESEARCH LIMITED, UNITED STATES. BUREAU OF LABOR STATISTICS

Record number of Australians employed in February as unemployment falls to 10%

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Original article by Gary Morgan
Market Research Update – Page: Online : 11-Mar-16

The long-running Roy Morgan unemployment estimate shows real Australian unemployment (10.0 per cent) is consistently higher than reported by the ABS (6.0 per cent) – and the higher Roy Morgan unemployment estimate "makes sense" when one considers record low wages growth. The ABS figures released monthly lack credibility. ABS estimated unemployment of 6.0 per cent in January – recognised as a figure close to "full employment". The ABS also reports Australian wage growth at a record low of only 2.2 per cent in 2015. These two figures do not make sense. The economic fact is that when an economy approaches full employment, wages growth throughout the economy accelerates and this causes inflation. This is not happening in Australia, and nor is it happening in the US. The US Bureau of Labor Statistics claims US unemployment of only 4.9 per cent on the most reported measure. However, a broader definition of US unemployment also released by the BLS (called U6) shows real US unemployment of 9.7 per cent. This higher US unemployment estimate is a much closer estimate of the real level of unemployment in the US and very close to Australia’s level of real unemployment. Both businesses and governments in Australia and the US do their economic modelling based on the wrong unemployment data.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIAN BUREAU OF STATISTICS, UNITED STATES. BUREAU OF LABOR STATISTICS