The latest unemployment numbers just came out, and they weren’t too good. Job losses, which had been slowing down for over a month, increased in speed again. The official unemployment rate, standing at 9.4%, looks set to increase when next released in early July.

But 9.4%, while bad, isn’t that bad, right?

After all, the Great Depression famously saw 25% unemployment at its height in 1932 and 1933. So this recession is bad, but nowhere near a depression… correct?

Sadly no.

You see, during the early years of the Clinton Administration, the way we measure unemployment changed. Discouraged workers – those waiting out the bad times – and the chronically unemployed – those who haven’t held a job in the past year – were dropped from the list.

Also, the underemployed were no longer counted. That means those with part-time work who wanted or needed to work full-time, couldn’t find better jobs. They might be paying the interest on their credit cards working nights at Denny’s, but they still need more work, and can’t find it.

Here’ what the new numbers mean to you and an easy way you can protect your portfolio from a prolonged economic downturn…

Same Unemployed, Three Different Numbers

All these categories of unemployed mentioned above were erased from the official unemployment rate – which the Bureau of Labor and Statistics (BLS) calls the U-3 rate. The BLS still uses a broader categorization of rates, which attempts to incorporate the underemployed workers back into the equation.

That rate? It’s called the U-6, and it stands at 16.4%.

That’s closer to the way we measured unemployment in the 1930s. But it still hasn’t gone all the way.

Economist Walter J. "John" Williams, graduate of Dartmouth’s MBA program and economic consultant to Fortune 500 companies, was invited to speak to the House of Representatives last year. His website, shadowstats.com, attempts to calculate economic figures in a manner consistent with past measurements.

For his unemployment charts, he adds in the last uncounted segment of unemployed workers – those who have been out of work for over a year. The range he’s arrived at, as of June 5, 2009?

Over 20%.

Frankly, it doesn’t matter how we count our unemployed – until we compare numbers to the past. But we’ve simply got to compare apples to apples to make real sense of the data.