How does your unemployment rate?

Stocks pared early losses to trade modestly lower Friday after the September nonfarm payrolls report came in well below Wall Street expectations.

Nonfarm payrolls declined by 263,000 in September, the Labor Department said Friday, noting that the largest job losses were in construction, manufacturing, retail trade and government. Economists surveyed by Dow Jones Newswires survey had expected a 175,000 decrease.

U.S. Unemployment Probably Higher Than Reported, Silvia Says

Unemployment in the U.S. is probably higher than September’s [26 year high] 9.8 percent rate reported by the Labor Department today because the number of people looking for work is declining, economist John Silvia said.

“People are just disappearing,” Silvia, 61, chief economist at Wells Fargo Securities in Charlotte, North Carolina, said today in a Bloomberg radio interview. “Discouraged workers go up. Marginal workers go up.”

The 263,000 jobs lost last month brought the total since the recession began in December 2007 to 7.2 million -- the most since the Great Depression.

The so-called participation rate, which represents the proportion of the population the workforce, declined to 65.2 percent in September, the lowest level since May 1986, from 65.5 percent in August.

“The reason the unemployment rate is not going up faster is because you have a lot off people dropping out,” said Silvia, a former congressional economist.

The government’s broader measure, known as the “U-6″ for its data classification, hit 17% in September, 0.2 percentage points higher than August. The comprehensive measure of labor underutilization accounts for people who have stopped looking for work or who can’t find full-time jobs.

Details of the report were almost universally dismal, with the number of unemployed people rising by 214,000 to 15.1 million.


But wait, there's more:

Jobs for March 2009 will likely be revised downward by about 824,000 or 0.6%, according to a preliminary estimate the department released Friday.

Back to the drawing board: Make that, uhh, 15.924 million.