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Broader measure of unemployment shows some improvement in Nevada through December

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By Sean Whaley, Nevada News Bureau: A broader measure of Nevada’s unemployment picture, including those who have given up looking for work, showed some improvement through the end of 2011, a federal report released this week shows.

The rate in Nevada dropped to 22.7 percent in the 12 months through Dec. 31, down from 23.3 percent in the 12 months through Sept. 30, 2011.

The quarterly report from the U.S. Bureau of Labor Statistics in part reflects improvement in the state’s official unemployment rate, which declined in both November and December when it hit 12.6 percent.

The national rate for the broader measure of unemployment in the 2011 calendar year was 15.9 percent. The only other state over 20 percent in 2011 was California, with a rate of 21.1 percent.

The report shows a state-by-state unemployment measure that encompasses discouraged workers and those who are working part time even though they would like full-time employment. When these individuals are counted, the unemployment rate is much higher than the official rate released each month nationally and by the Nevada Department of Employment, Training and Rehabilitation.

Nevada leads the nation both in the official unemployment rate and this broader measure of joblessness.

Jered McDonald, an economist with the state Department of Employment, Training and Rehabilitation, said Nevada still has a significant number of discouraged workers who have given up looking for employment.

“It’s going to be, probably, another couple of years or so before that falls into the teens at the rate we’re going,” he said. “So this is a long-term deal. We’re coming out of this recession probably slower than we have any other recession and it’s just going to take some time.”

When the economy does pick up, the gap between the two measures should narrow, McDonald said. During the last economic expansion, the two numbers were within a few percentage points of each other, he said.

The Alternative Measures of Labor Underutilization for States shows six different jobless rates using different measures. The broadest definition, U-6, includes discouraged workers, defined as people who want work but who had not searched for work in the previous four weeks because they believed no jobs were available to them. It also includes “marginally attached” workers, defined as those who had not looked for work in the previous four weeks for any reason.

Finally the measure includes those employed part-time for economic reasons, defined as those working less than 35 hours per week who want to work full time, are available to do so, and gave an economic reason – their hours had been cut back or they were unable to find a full-time job – for working part time. These individuals are sometimes referred to as involuntary part-time workers.

The Bureau of Labor Statistics notes that this broader definition of unemployment is based on relatively small sample sizes at the state level.

Audio clips:

Jered McDonald, an economist with the state Department of Employment, Training and Rehabilitation, says it will take a couple of more years for the rate to fall into the teens:

020312McDonald1 :16 take some time.”

McDonald says when the economy picks up the gap between the official rate and the broader rate should narrow:

020312McDonald2 :32 to that point.”

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