Report could indicate 9.5 percent of Americans are out of work
Pamphlets with information about unemployment are displayed at Eastbay Works Oakland One-Stop Career Center in Oakland, Calif.
TEXT OF INTERVIEW
JEREMY HOBSON: Later this morning we'll find out how many new people filed for unemployment benefits last week. And tomorrow we get what many economists consider to be the most important economic indicator of the month. It's the monthly employment report from the Labor Department. It'll tell us how many jobs were gained or lost in November and what the new unemployment rate is.
Here to help us sort through all the jobs data is our economics correspondent Chris Farrell. Hi Chris.
CHRIS FARRELL: Hey Jeremy.
HOBSON: OK we're going to do a little bit of a lightening round here for you -- something a little different this time. You ready?
HOBSON: So we're getting this monthly unemployment rate from the Labor Department tomorrow. Why does that number matter if everyone knows the actual number is much higher?
FARRELL: It has the virtue of being consistent. It's the headline number, it's the bedrock definition of unemployment, it's been around for a long time. It's like saying, "The Dow Jones Industrial Average is up." We know that's only 30 major stocks, but we use that has our shorthand.
HOBSON: OK and the number tomorrow is probably going to be -- I don't know -- 9.5, 9.6 percent something like that. What do you think the actual unemployment rate is in the country?
FARRELL: Our broadest measure of unemployment and underemployment is 17 percent, 26.4 million Americans. That's the number to watch.
HOBSON: OK, now why do economists focus on the private sector payroll number that we got yesterday from this ADP, the private payroll company?
FARRELL: We're in a capitalist system, and we want to see business investment and business hiring and wealth creation. So, that's the number people focus on because if the private sector is hiring that means that this recovery will get some strength.
HOBSON: OK finally Chris, today we get readings on weekly jobless claims. The number is always right around 450,000 or something like that, or at least it has been in recent weeks. If there are 450,000 new people filing for unemployment every week, doesn't that mean like half the country is getting unemployment benefits?
FARRELL: It does seem like that. And what we tend to do is look a the long term average -- four week moving average. It has been coming down, but yes a company announces, "We're laying off 1,000 workers," they go down to the office and they file for their initial unemployment claims, and that's the number.
HOBSON: But why is that number so high? 450,000 a week being the new people?
FARRELL: We are a very large economy. I mean think about it, 26.4 million Americas are unemployed and underemployed. And so yes, it's a very big number.
HOBSON: OK Marketplace's economics corespondent Chris Farrell, thanks so much Chris.
FARRELL: Thanks a lot.