by Calculated Risk on 12/14/2020 11:33:00 AM

The headline unemployment rate has fallen to 6.7% in November, but that significantly understates the current situation.  Note that the headline unemployment rate was 3.5% at the end of 2019.

Here is a table that shows the current number of unemployed and the unemployment rate. Then I calculated the unemployment rate by including the number of people that have left the labor force since early 2020, and the expected growth in the labor force.

As the economy recovers, many of the people that left the labor force will probably return, and there will likely be more entrants into the labor force (although recent demographic data has been dismal).   This will keep the unemployment rate elevated for some time, and suggests the need for additional disaster relief.

	Number (000s)	Unemployment Rate
Unemployed	10,735	6.7%
Left Labor Force	4,139	9.0%
Expected Labor Force Growth	1,000	9.6%

This is just the headline unemployment rate. There are also 2.3 million additional involuntary part time workers than in February (these workers are included in U-6).

Note: I'd be careful looking at the weekly initial claims report in addition to the BLS report. The weekly claims report suggests there are millions of workers receiving pandemic assistance, but this should be captured in the BLS household surveys (so I wouldn't add the numbers together).