Unemployment Won't Be Falling Anytime Soon

Private sector employment worsens last month.

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The new ADP report shows a bigger than expected drop in private sector employment for August. The Journal reports that most economists predict the official unemployment will tick back up to 9.5 percent, after a slight decline to 9.4 percent in July.

The numbers on private sector employment are probably worse than they sound because what they suggest for discouraged workers and other "marginally affected" workers.  As I recently wrote about, the unemployment rate doesn't capture just how bad labor markets are because they don't count workers who gave up looking for work or those who were forced to go part-time. When private sector employment is dropping, it's a safe bet that more people will have to give up looking for work for lack of opportunity, and that more people will have to take part-time positions for lack of full-time work. So the unemployment rate plus the number of "marginally affected" workers is likely to stay above the levels of the early 80s recession.

In other unemployment news, the BLS released its unemployment numbers on metropolitan areas for July. The two metro areas with more than 1 million people that have the lowest unemployment rates are Oklahoma City and Washington, D.C., two capitals. For more on how government-heavy cities have somewhat of a tendency to be recession-resistant, click here.