The true face of US unemployment

Investors may be buoyed by talk of a US recovery - but a far bleaker story lurks behind America's unemployment figures.

Six months ago everyone was talking about the risk of another US recession. Now, the talk is of the strength of the recovery. Last week's non-farm payrolls data showed that unemployment fell to 8.3% in January. Quarterly GDP grew at an annualised rate of 2.8% in the fourth quarter of 2011. Consumer confidence is at its highest for nearly a year.

So, is it time to break out the champagne? Not quite. While the outlook is clearly improving, there is still plenty to worry about. The payrolls data showed that 250,000 private-sector jobs were added in January, while employment figures for previous months were also revised upwards. However, unemployment still remains high especially if you look beyond the headlines.

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