Unemployment: Don't Uncork the Champagne Just Yet

Unemployment, we're told, just dropped below the 9 percent rate for the first time since...forever.  I think the drop nationwide was one tenth of one percent.  Good news, for sure:

From BusinessWeek:

Factories added 33,000 jobs. Education and health care added 40,000 positions. Professional and businesses services added 47,000. Leisure and hospitality added 21,000 jobs. Construction companies, 33,000 jobs -- although a good chunk of those reflected people coming back on payrolls after January's harsh winter weather; Transportation and warehousing added 22,000 jobs.

But don't put your party hats on quite yet.  The actual unemployment rate, including those out of work for over six months or more, those who have given up hope, those who may have taken part-time work while trying to get back in the workforce--when one includes these workers--the true unemployment rate has been in the vicinity of 17%.

It's unclear to me what the trend will be going forward.  The private sector appears to be showing some willingness to hire, but we're also facing a wave of public-sector job losses in coming months--with states like Wisconsin and Ohio simply being the poster children.  The losses are going to be nationwide, and they will be painful.  As state and local governments finalize budgets and shed workers, the fallout may well swamp this very weak private-sector growth we're beginning to see.

To get a better view of what US unemployment actually looks like, the graph below (click on graph for full interactive view) tracks both the commonly used short-term unemployment figure (the 'rose-tinted glasses' view) vs. true, total unemployment/underemployment, from 1995 through 2010, including two officially-recognized recessions.  To repeat--I don't see anything worth celebrating here, expecially given what we're already seeing on the public employment front.