Political Discussions
True unemployment by X-mas
Posted by csiunatc • 8/10/09 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: unemployment
With unemployment constantly on the rise, what is your guess that the true unemployment will be at x-mas '09?
User Comments
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Hopefully it will stagnate by then, driven by the Christmas rush.
www.guardian.co.uk/business/2009/aug/07/nonfarm-payrolls-us-unemployment
The US unemployment rate dropped last month for the first time since April 2008, a surprise fall greeted by the White House as evidence that the world's largest economy has been pulled back from the brink of depression.
Although employers cut 247,000 jobs in July, by a statistical quirk the size of the labour force fell faster than employment, so the monthly rate of unemployment fell to 9.4% from June's figure of 9.5%.
The figures were far better than economists anticipated and they sent stockmarkets surging in London and New York. The FTSE 100 index climbed 46 points to 4,737 while on Wall Street, the Dow Jones Industrial Average gained more than 140 points during early trading. The dollar rose against the euro and the yen.-
El Presidente says it is good news, Forbes. com says it is bad news...
From Forbes. com:
"Most importantly, the unemployment rate fell because of a statistical quirk: 247,000 jobs were lost, but an even greater number of people left the "labor force" using the government definitions. Since unemployment only measures the "labor force," a shrinking force perversely produces a positive number. A shrinking labor force is not a positive, especially since, as noted by Millan Mulraine, an economist with TD Securities, it shrank because discouraged unemployed workers appeared to have left in droves in July.
Even worse, the Economic Policy Institute highlights that the number of workers who have been unemployed for over six months increased by 584,000 to 5 million.
So, 584,000 people fall into long-term unemployment. For regular unemployment, 247,000 jobs were lost and 422,000 people left the labor force altogether, but since the latter number is larger, the rate "improves." That's why the 9.4% rate is the bad news."
Yet Obama says this:"While we've rescued our economy from catastrophe, we've also begun to build a new foundation for growth. That's why we passed an unprecedented recovery act less than a month after I took office, and did so without any of the earmarks or pork-barrel spending that's so common in Washington."
www.npr.org/blogs/thetwo-way/2009/08/obama_weve_rescued_our_economy.html
Okay, does anyone remember this absurd photo op?
I thought he was out of his mind doing that back then and I think Obama is just as out of it saying that he saved the economy. Funny El Presidente wants it both ways. If things are bad, it is Bush's fault. If things get better, Obama gets all the credit. Amazing.
Further he has the gall to say the stimulus bill was "without any of the earmarks or pork-barrel spending that's so common in Washington."
ROFLMAO...
"There's $1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There's even $650 million on top of the billions already doled out to pay for digital TV conversion coupons."
And that is just the tip of the iceberg.
online.wsj.com/article/SB123310466514522309.html -
Yeah the "no earmarks" remark has to be my new favorite.
Makes you wonder if he just doesn't mind lying, or if he is really that clueless. -
Do you have the link for the Forbes article? I'm curious as to where the people who left in droves went? Why they left? (why would you leave your job in the middle of a recession? Seems dumb to me but I don't have the article to read it in context...)
Now - I certainly don't view a .10% drop a signal as to the end of a recession - however I do think it means that there hasn't been an increase in layoffs - which to me, shows a slowing or stagnation in the overall unemployment rates.
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The labor force fell by 400.000 because their benefits ran out. So that's only a good number for the ignorant.
The stock market and dollar are inflationary kept strong by growing unemployment.
These numbers all point straight to hell, and no handbasket in sight.-
Erik, I don't get you. You complain about the stock market taking a dive because it will kill the economy, then claim that it's only going up because unemployment makes it go up - so going up is bad. But when it goes down it's bad.
*throws hands up*
Where are you getting your numbers from? -
I get my numbers from The beaureau of labor statistics.
And yes, the stock market going up in a "jobless recovery" is bad. This is because commpanies are reporting better earnings than expected, but these earnings are based on cutbacks, not growing business.
Hey, it's great for making a quick buck, but it's completely unsustainable, leading to bigger problems down the road.
Right now, the stock market is correcting it's initial overreaction and it's being propped up by inflationary influxes, as well as cost savings instead of profit increases. The actual inflation is being held low because of high unemployment.
When unemployment is up in the ranges of 20%, in an economy that is 80% driven by consumer spending. You have a serious problem, and just because the statisticians are choosing not to count the people that are out of unemployment benefits doesn't mean that we're actually seeing any improvement.
We lost another 250k jobs last month, the job market has to grow with 10-25,000 jobs every month to just stay abreast with population expansion.
If you thought the housing crash was bad earlier, wait until the millions of people who have lost their jobs and are able to stay in their homes merely on Unemp. Benefits run out.
My only problem is that I don't think there's any time left. Time ran out for 400k people last month, and as you know, layoffs started escalating last fall / winter. So that's where we are at now. Next month unemployment could drop significantly if you look at the reported U3, but if that happens, and we are reporting job losses at the same time, you can just do a simple calculation.
This is not a "Statistical Quirk" like your qoute says, this is a death spiral in an economy thats built on spending.
It's no longer about the banks tightening financing, this is about the system stalling completely. To get a complete breakdown, you won't need 100% unemployment, i'm guessing that in the current state we are in, we'll seize the economy at about 25-27% true unemp.
The problem now is the inflationary effect of the stimulus work the Fed has done printing money, like i said, we're stemming the inflation because of rising Unemployment. Should unemployment ACTUALLY decrese now, inflation will go rampant. Hyperinflation has happened with less monetary influx into systems than what has been done in the last 8 months.
Add to that problems that aren't being seen by most, like the faliure of the 5yr bond auction at the end of July, and it looks like REAL financing of debt is running out completely.
I'm going to go ahead and say that were about to see another major drop like we saw before, Back in october i predicted 6500, and was within 60 points or so. this time, I can't set a floor no matter how i turn the numbers.
I'm out completely of the non commodities as of today. -
Relevant to Above.. money.cnn.com/video/news/2009/08/10/n_unemployed_benefits.cnnmoney
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This is because commpanies are reporting better earnings than expected, but these earnings are based on cutbacks, not growing business.
Hey, it's great for making a quick buck, but it's completely unsustainable, leading to bigger problems down the road.
OMG Did you just state that the desire for a profit (increase) is bad for the economy because it requires the companies to lay off or cut pay? Are you actually stating that a company's prerogative to make as much money as they can using every legal (albeit unethical) means possible creates an unsustainable economy and thus bad?
Are you actually stating that companies should be putting people over profits?!?!?!
*has small coronary*
I'll address the rest of your comment later - when I've recovered
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I'm looking at the labor statistics here:
www.bls.gov/news.release/empsit.nr0.htm
And it would seem that the unemployment situation is actually starting to stall. Some quotes from the page:
Here we can see that the national unemployment rate has changed very little.
In July, the number of unemployed persons was 14.5 million. The
unemployment rate was 9.4 percent, little changed for the second
consecutive month. (See table A-1.)
Here we can see that the total job loss per month has decreased by half when compared to the first part of the year:
Total nonfarm payroll employment declined by 247,000 in July. From May
to July, job losses averaged 331,000 per month, compared with losses
averaging 645,000 per month from November to April. Since December
2007, payroll employment has fallen by 6.7 million. (See table B-1.)
Here we can see that the number of people without a job for more than 27 weeks (not recently laid off) rose to 1 in 3:
The number of long-term unemployed (those jobless for 27 weeks or more)
rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemploy-
ed persons were jobless for 27 weeks or more. (See table A-9.)
And here we can see why they haven't gotten jobs:
Among the marginally attached, there were 796,000 discouraged workers
in July, up by 335,000 over the past 12 months. (The data are not
seasonally adjusted.) Discouraged workers are persons not currently
looking for work because they believe no jobs are available for them.
The other 1.5 million persons marginally attached to the labor force
in July had not searched for work in the 4 weeks preceding the survey
for reasons such as school attendance or family responsibilities.
So......it looks like unemployment is at a stand still.
By all of the information there, lay offs for this period have declined by half (give or take) in most industries compared to previous periods. -
Ok lets address this in reality.
Find me ANY capitalist that wouldn't prefer long term profitability over short term gains. There isn't a trader out there that wants to make CASH in an inflationary economy. It's not a good idea to gather a commodity of any sort that is looking to decrease in value.
Any capitalist will tell you that an unsustainable increase is bad for the economy. It has nothing to do with people or profits, it has everything to do with the economy itself. The ECONOMY has to be healthy. Companies, People, and Profits make up the economy as parts of a whole.
Just like anything else, for instance the stimulus, you can't mess with one side and forget about the rest, you want a strong healthy economy increasing in value because of Growth, not because the companies are beating the bad prognosis.
It's like picking the next Marathon winner in a casualty ward by which one is bleeding the least. Sure, he or she might win, but the time will be something like 19 days, 4 hours and 21 seconds, which isn't something to be celebrated.
It’s not as limited as you say, companies putting one thing over another, everything is interconnected, without profits, no jobs. So it would be as accurate to say that people should put their companies profits over themselves.
These companies, that are now reporting profits, are reporting profits based on previous production, minus current costs. Which ends up meaning that current production will be less, equalling lower revenue and thus lower overall profits.
Now, let’s look at the unemployment, again, "Stalling" isn't good at all. In fact, crashing is preferable to a jobless recovery because of the statement above. A straight forward crash is a reset. A crash preceded by a "jobless recovery" prolongs the problem significantly. In that when the crash occurs, there is no money in people’s pockets to take advantage of the price crash. (And no, consumer credit is NOT a viable lasting alternative to actual ready capital)
Look at the video I Posted from CNN Money, where they are talking about 1.5 million going into the discouraged category before years end. These are the people that are currently still participating in the marketplace, who will essentially be out of it by years end.
As long as we are adding people to the front end (240k+ last month) and dropping them off the back end no longer counted ( which is where the workforce dropped 400k workers last month). We are shrinking the economy, this economy that is built on Consumer spending has already shrunk by more than a third total since the beginning of the year and closer to 50% since the peak economy. Now, pay close attention to those numbers. Unemployment has increased 4- 5% officially, but the economy has shrunk 50%, that relationship in itself shouldn't be hard to understand what it means for the future economy, again remember that this is a country built on 80% by the consumer spending.
Now, with more people reducing their income (240k), more people growing into long term unemployment, (=depleted savings) and people not being counted at all anymore (essentially Zero income) we can assume that the consumer spending will decrese further.
Again, lets use the bleeding man as a simile for the economy, just because he is laying on the street and you can see that he is bleeding less than he was before doesn't mean that he is on the way to recovery, there just isn't as much blood left to shed.
We aren't seeing a "Stall" at all, we are seeing the effects of having less and less jobs to cut. We need +10-25k net growth every month to be in a stall, and none of those jobs can be government jobs since every dollar spent ona gov't job requires about 3 dollars earned in the private sector to exist.
We saw this exact phenomenon in the 1929-1930, where the stock market recovered sharply after black thursday and the close period after leading up to their low point, but the reality of that number was that the economy in a jobless recovery peaked quick and came down lower than it was, and I'm pretty sure you know what the next five years looked like.
The proof that these "slowing numbers" aren't having any positive effect can be seen in other areas. Like for instance. Food Stamp Enrollment, where we can see the true level of spending power in the economy.
www.forbes.com/feeds/reuters/2009/08/06/2009-08-06T152646Z_01_N06328040_RTR...
If all we have is unemployment checks and food stamps going out that make up an ever growing part of the consumer spending, we are in fact not getting anywhere but closer to the cliff.-
Yes, but the numbers are not doing what you say they are doing - I've already used your own source to show that. People who are discouraged are not seeking jobs - not that they have no jobs to accept.
And you have always intimated that short term profits are better overall. Cutting taxes for companies, abolishing minimum wage so they can pay their employees poverty wages...all of that temporarily increases the number on the bottom line - but is not sustainable.
Our unemployment levels have not reached those of the great depression (where the NATIONAL count was over 24%, compared to our 9.4%) and the national poverty level hit 60% because employers refused to pay living wages. Nor has the stock market made any kind of "sharp upturn" that should warrant any kind of panic on that level. Everything has been quite gradual. Of course, when it's moving too fast that's bad, and Obama's fault, and when it's too gradual, that's bad too. And Obama's fault.
Of course some things are different - we've slowed and stopped many layoffs and total disruption of our economy through intervention - of which several loans are already being paid back by the companies - we have social programs to help keep people in need afloat until we recover (we didn't have those programs back then - it was more of a Libertarian's utopia, except it was a nightmare), and we have more labor laws in effect to protect people from hitting absolute rock bottom like we had in the depression.
I'm not seein' the panic here at all. But, I don't think it's going to matter what happens in the future. If unemployment goes up, it'll be Obama's fault, if unemployment goes down, it'll be bad for the economy doomsday scenario, and Obama's fault.
*shrug*
you asked what will happen, I predict a stalling or stagnation until spring, where unemployment will decrease by half per period as it has been.
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Wow, seriously Anok, go do your homework.
We LOST 244k jobs, and you think that the discouraged are just not "out getting jobs".
The Discouraged group iS INCLUDED in the U6, that is not the number that is truly interesting.
The interesting number is the workforce reduction, which are the people who are no longer counted at all.
Again, go study what the TRUE unemployment is, and don't just accept that the BLS reports are all encompassing. They're missing a huge portion of the market. The ones that are no longer considered part of the labor market because they fall outside the "norm" of being part of the labor market.
You should know this, these numbers were created like this to hide the true unemployment among minorities.
My god, unemployment going down will be GOOD For the economy, and to some extent it will be to Obamas credit.
The dollar however stands to take a serious hit when that happens, which is due to Obamas Fiscal policy of printing money, Which is bad for the economy.
But again.. You always miss to see the reality and hide behind sweeping generalisations. You know.. One thing can encompass things that are both good and bad. You should look into that as well.-
I asked you were you were getting your numbers from - you said the BLS - so that's where I took my numbers from.
So where are the numbers for these mysterious people who have disappeared?
The number of people laid off this period is half the number compared to last period - and the people who are discouraged ARE included in that 14 million. The studies I quoted very clearly stated that over 1 million of them stated school and family as their reason for remaining unemployed.
Unemployment is starting to go in reverse, slowly (as it will, it's not instantaneous!).
So what's the problem?
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FROM THE BLS REPORT! Jeez, it's not THAT long.
"The civilian labor force participation rate declined by 0.2 percentage
point in July to 65.5 percent. The employment-population ratio, at 59.4
percent, was little changed over the month but has declined by 3.3 per-
centage points since the recession began in December 2007. (See
table A-1.)"
Unemployment is not reversing, there's just less blood to let.
THATS the problem.-
Yes, I read that. It states that the ratio has declined 3.3% and otherwise changed little since 2007. That does not give me the numbers you are claiming, though.
Again, go study what the TRUE unemployment is, and don't just accept that the BLS reports are all encompassing. They're missing a huge portion of the market. The ones that are no longer considered part of the labor market because they fall outside the "norm" of being part of the labor market.
Where is this huge market? Where are the numbers to support this claim, and if the employment/unemployment is "outside of the normal labor market" what does it have to do with unemployment based on the economic crisis?
I am an "unemployed due to being outside the normal labor market" I stay at home, but also freelance. I am not considered employed or unemployed. By choice, mostly (Also because jobs don't pay enough to cover child care here, but that's another story). My "unemployment" has nothing to do with the current financial crisis.
Nor does anyone who chooses to leave a perfectly good job, in lieu of other pursuits.
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@Anok...So you are saying that the recession is over? We have no more worries? Why are you trying to hard to defend El Presidente? I don't get it.
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My god,
I really don't have time to teach you statistics, go back, read table a-1 and see if you get it.
But you know, in the end, you sit on your fluffy cloud being fed the statistics that make things look great never mind that 240k plus jobs were lost net, we must be getting better..
I guess we'll see who's right, You believe it will stagnate at years end, I've bookmarked this post, and i'll be happy to return to it then.
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