Jobless rate slows, unemployment up and traders are happy

Revelation of Truth

  1. The thought is ridiculed
  2. The thought is resisted
  3. The thought is finally considered self evident

There are so many people that have run out their unemployment benefits and have either:

  • Just stopped looking and aren't working
  • They had to take part time work

In these economic times of a prolonged recession, oops better get my words in order her, call it an economic down turn.  Did the powers to be ever really say the R word.  Did we hit enough quarters for them?  I know for a long while they would take any positive growth, no matter if it was imperceptible, they took it just so they didn't count that quarter as negative.

But back to the unemployment.  I feel that publishing the U3 is eye candy for the masses.  The powers to be hope that the U3 acts in the same manner as the Revelation of Truth.  That even though it is not exactly the entire story, if people hear the better news long enough they will except it as truth.

We are living in an era that, even though unemployment is up in May, the stock market celebrates.  It celebrates because layoffs in the Month of May have slowed to a bit over one third of a million people.  Lagging indicator...hm?

  1. Our federal government is so deep in debt that in my lifetime there is no possible way out
  2. Manufacturing on the USA shores is still dead
  3. Personal credit card debt is still a yoke around American's necks
  4. The dollar is getting trounced
  5. Wage stagnation is still alive in the USA
  6. There is still a glut of unsold new housing units, some of which sit rotting in the sun
  7. There is a glut of new cars sitting on dealer lots
  8. The health of banks is still questionable
  9. The new green jobs are sent off shore

So the stock market traders (my ex-working brethren) are happy.  Why does the DOW at around 10,000 keep ringing in my head?  Why does a bear market rally keep ringing in my head?  Why does the climbing DOW seem surreal?

It must be the rainy day that has me in a mood.  This weekend is an annual big event in my town and one that sells out every hotel and motel room in the vicinity.

I know a guy that runs a local Marriott.  They have a 48% occupancy rate for this coming weekend. Normally it would be 100% and you can't get in a restaurant.  Why do I think we won't have a hard time eating out on Saturday night?  Why do I feel that the way things are now is the new America?

Jobless rate hits 9.4 percent in May; layoffs slow Jobless rate jumps to 9.4 percent in May, even as layoffs slow to 345,000 * Jeannine Aversa, AP Economics Writer * On Friday June 5, 2009, 10:24 am EDT 

WASHINGTON (AP) -- With companies in no mood to hire, the U.S. unemployment rate jumped to 9.4 percent in May, the highest in more than 25 years. But the pace of layoffs eased, with employers cutting 345,000 jobs, the fewest since September. The much smaller-than-expected reduction in payroll jobs, reported by the Labor Department on Friday, adds to evidence that the recession is loosening its hold on the country.

It marked the fourth straight month that the pace of layoffs slowed. "This tide is turning," said Richard Yamarone, economist at Argus. "We expect this trend of slower job loss to continue throughout the year." Still, the increase in the nation's unemployment rate from 8.9 percent in April underscores the difficulties that America's 14.5 million unemployed are having in finding new jobs.

Economists had expected the rate to hit 9.2 percent last month. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4 percent in May, the highest on records dating to 1994.

 

 

Meta: 

Comments

Anyway you slice it

The employment market sucks.

Unemployed, Underemployed, Uncounted, Disgruntled, Part timers being counted as employed .... and the big news that NOBODY is reporting .... there has been an entire tsunami of unemployed just thrust onto the market and ARE NOT counted ... I am speaking about the new graduates of our Colleges, Universities and High Schools that will be looking for work but will not be counted.

So forgive me if I do not pop the cork on the champagne bottle to celebrate the "less bad" bullshit numbers.

• The 8.9 percent April unemployment rate was based on 13.7 million Americans out of work. But that number doesn't include discouraged workers or people who gave up looking for work after four weeks. Add those 700,000 people, and the unemployment rate would be 9.3 percent.

• The official rate also doesn't include "marginally attached workers," or people who have looked for work in the past year but stopped searching in the past month because of barriers to employment such as child care, poor health or lack of transportation. Add those 1.4 million people, and the unemployment rate would be 10.1 percent.

• The official rate also doesn't include "involuntary part-time workers," or the 2 million people like Noel who took a part-time job because that's all they could get, plus those whose work hours dropped below the full-time level. Once those 9 million workers are added to the unemployment mix, the rate would be 15.8 percent.

Spare me, Obama, with your U3 numbers that seek to disguise what my eyes see. Does anybody think they have massaged these numbers ahead of the forthcoming GM and Chrysler layoffs?

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Huh?

And this shameless innanity from Bloomberg:

"Job Losses in U.S. Slow More Than Estimated in Sign Recession Is Abating"

I mean, really, talk about cheerleading! A reduction in the collosal monthly rate of job losses over the last year or so is interpreted here as a slow-down in the recession? How so? A slow-down in job losses, perhaps, and probably a monthly blip, but an improving recession? How is that connection established? I'd say there's about as much substance to that statement as Bush's remark that "We don't torture".

This kind of yahooism is endemic at Bloomberg. Every day more than half of their headlines require confirmation from economic commentary elsewhere. What clearer example of the Big Lie might one have these days other than the constantly hyped hysteria over a supposed Iranian "nuclear weapons program". Both of these causes operate from much the same premise and serve, in all too many instances, the interests of the same people. When unemployment hits 12% sometime next year, the market is back down in the 6500 range, and we've had a couple of large scale demonstrations that have turned violent, will we still be hearing that an additional 325,000 monthly job losses are a sign of improvement?

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cheerleading vs. EIs

Why the title at Bloomberg reads like it does is the unemployment rate is a major economic indicator in a recession. It is also a lagging indicator.

So, when they see a decline in the newly screwed and fired, i.e. the latest new unemployment claims...that is an indicator (normally) that the recession has hit the bottom and is starting to recover.

They are not coming from outer space, this is a major economic indicator that all economists as well as investors watch.

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Yeah, but a real bottoming out

Would be this lagging indicator switching from - to +, not from big- to lesser -.

So call me skeptical until the recession is *really* over, not just potentially over.
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Maximum jobs, not maximum profits.

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Maximum jobs, not maximum profits.

"jobless recovery"

says it all. One can have a "recovery" while working America is royally screwed, falling more and more into poverty, standard of living declining.

I'll have to take this up as a blog post later.

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Confirmation?

Robert,

With all due respect, I understand all of this about lagging indicators. My point is that we're being hyped into believing that we've actually got a lagging indicator here. We have one month of data in which job losses are sub-600,000. At this point, there's absolutely no sound reason to believe that May's results won't be reversed and June's numbers revert back to the 600.000 + figure to which we've all gotten used. Before anyone starts flapping their gums about an easing recession, I'd submit that the humility of waiting for confirmation might be well advised. Unless, of course, there's some rather compelling self-serving reason that gets in the way.

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more EIs are too divorced from the middle class

Bloomberg's audience is the super rich, the investor with at least $100k portfolios and so on.

This has been a major problem generally with EIs, they are not weighting enough of working America, what is happening on main street, in my opinion.

Take 2002, while the numbers said the recession was over, the fact is middle class wages were on a downward spiral, employment security was a joke now and they blasted all retirement for the next generation.

So, that's a hidden timebomb which doesn't get enough attention...

I mean it's like it's not realized without a middle class not only does one not have a Democracy but also it will lead to macro economic implosion.

But all of that said, a minor drop is a signal, so ya know, gotta read up on EIs and what they all imply to get the headline.

EP is all about focus on main street, right. We don't have Populist in the title for nothing.

But, by the theory, by the statistics, by the numbers is the focus, not just blasting and name calling (although that is allowed, more put your outrage next to a graph and statistics table).

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A Fix

Robert,

"But, by the theory, by the statistics, by the numbers is the focus, not just blasting and name calling ..."

Well, nothing compels my posting here if someone is going to be made in some way uncomfortable by it. Consider the problem remedied.

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that's not what I meant at all

not at all and for comments, blast away, it's more for posts where the data, stats need to be there to back it up.

I just have on my mind how EP is not only growing, it's taking off because the writers are posting such detailed economic analysis, statistics, references...

so I just want to keep that direction going.

I post a lot of comments, fast, trying to keep up the general dialog so we can have a conversation and like most conservations, sometimes something is typed which might sound wrong from it's intent and so on.

Not even directed at u.

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I finally figured out what bugs me about the above statement

I feel exactly the opposite, unless somebody becomes uncomfortable with what I post, then I might as well be talking to thin air. Only the uncomfortable ever change.

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I would argue

My job depends on consumer purchasing power. The EI's are deceptive.

From Credit SlipsThe fact of the matter is that there is already a tremendous credit contraction going on in the credit card space.  The chart using data from Carddata.com shows the annualized rate at which card issuers are closing down accounts at their own initiative.  As of April, it was 19.01% (I understand that to mean that in April about 1.6% (=.19/12) of all accounts were closed).  Remember, this is account closings, not credit line reductions, which are occuring on top of the account closings. 


In other words, a fair conclusion is that even without the legislation, we'd be seeing credit lines cut and eliminated right and left. 

(Chart included at the site). 

Crude Oil has risen 53% since Jan. 09. 

We still have record job losses, personal and small business bankruptcies and the unknown effects of Bernanke flooding money supply.

 

It is possible that as Naomi Klein prophesied that the transfer of private debt has been transferred to the public and economic recovery will result in an wider chasm between socioeconomic classes. In that case, the EI's are indicative of recovery.

Unfortunately, the former middle class constituents will not see it realized.

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There are No Jobs

How can you look for a job when there are no jobs? Most of the jobs in my field are reserved for those under H1b. Oh well, that's the change we voted for..where are the 3 million jobs?

Indian CEO says that some Americans are unemployable:

http://www.informationweek.com/blog/main/archives/2009/06/top_indian_ceo...

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I think he actually hit upon something important:

FTA: "Many American grads looking to enter the tech field are preoccupied with getting rich, Vineet said. They're far less inclined than students from developing countries like India, China, Brazil, South Africa, and Ireland to spend their time learning the "boring" details of tech process, methodology, and tools--ITIL, Six Sigma, and the like."

I think that covers what our government has pushed as well- if you don't make over $100,000/year, they don't want to even hear about you.

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I've always wondered about the math

The article said "Beyond the need to bolster competencies in math, the hard sciences, and basic problem solving, U.S. schools at all levels must place a greater emphasis on global history, foreign languages,"

The last time I looked (I'm not a computer scientist) but computer languages are not all about math. It is about nesting, having your html tags in order, using your Java scripting, your C++ languages, etc.

I am sure at some point algebraic expressions come into play and you need to know about if-than statements but are do the people that write the code need extensive math?

I know a guy that runs the regional IT department for a large department store. I asked him the math question. He tells me it is a artificial argument.

Or has the CPM experiment, method of teaching math to students been such an abysmal failure that they can't even do simple math?

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If you get high enough

Then there are certain calculus techniques, often derided as hopelessly impractical before 1970, that make a lot of sense to do iteratively. If you can get a student to that point, math starts teaching programming, not the other way around.

Oh, and scripting, while commanding the big bucks right now because of the web, is just the tip of the iceberg when it comes to computer programming.
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Yeah my 15 year old

is into scripting. I don't know when it happened but he smokes me now with the computer stuff. I think it started two years ago with his classes in school. The one year was HTML1 and then he had HTML2. During the summer months the IT person at his high school has him come in to help with the department. His website makes mine look like childs play. He speaks about things that I know nothing about which makes me feel order than my true age.

He wants to get his school onto the open source stuff and of course he wants to have his hand in it.

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Script Kiddies

I too am often amazed at what they can get mere scripting languages to do. And then I end up having to deal with their database design skills....I can't believe I have to create 3 records for each external resource into a project management database. That should be a top level data structure in third normal form, with 1:many relationships with all children.

Not to mention they globalized the physical primary key over several tables. GRRR.

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noslaves.com

I've been rebuilding the noslaves.com site as a place for techies, professionals to discuss and organize on their career issues.

I just put up a post on this here.

the site is in BETA, so I hope you go over and join it, help me debug what's wrong and more importantly get it off the ground.

The Economic Populist is simply a major economics site now and hence, career issues for techies, while the big legislation and other issues assuredly needs to be posted (and believe me, I will), there is no online space devoted to all things "techie career" for "all techie things, 24/7".

So...wala, new site.

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Temp work helps mask joblessness among Americans

Temp work is also masking the true problem. I'm just tired of all the BS shell games played upon us from our government. They are trying their best to blow some bubbles back up. All the politicians care about is how things are perceived, not how things are in the real world.

Until the masses start catching on to the game, the politicians will keep the game going. I think with the current economic pain, people are maybe, just maybe, starting to see the game. The game is also the government giving handouts to people for votes. It doesn't matter about financial ethics or if we can afford it, it is about herding groups of people into the corral that will vote for them.

Throughout history the countries that are survivors will have people that are self reliant, have economies that produce, have possibilities to move up the economic ladder and wages that support the chances to make economic moves.

A long time ago I took the pill from Morpheus to try and see the real world. I have a lot of friends that refuse to take the pill and are willing to stay fat, happy and uninformed.

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you need some statistics, data in your post

Seriously. EP is an economics blog so you have to give some estimates on precisely how many underemployed or those who have dropped entirely out of the workforce are here.

I mean it's all true what you are saying and a good rant is assuredly what EP is about...but folks, try to back up your rants with that econ 101 book that is gathering dust in your attic.

Precisely what is the underemployed estimates? They vary widely but we need they must be on the high side...so find the methodology from some obscure Academic, look it over, make sure it's credible and use it.

I've got a question: How many homeless have a college degree? A PhD? A Masters? How many families homeless?

How many adults, overall living with Mom&Dad, not even in the workforce at all,completely dropped out?

Just a suggestion but good hard data, we love good hard data on EP.

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I have a homework assignment

Not sure if I have ever had a link to someone that supplies the stats for the fallen off the unemployment rolls. Not ever sure how you would do it. The BLS is probably the only one that has the resources to do it. But I'll search around.

Also the people that never show up on the stats are the self-employed. That painter that would sub from the GC during boom times, never even received unemployment so he never even had the chance to fall off the cliff.

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Another opinion.

When the gov't stats come out it is time to check with John Williams at shadowstats.

Chart of U.S. Unemployment

Hmmm, U6 is above 20%! And what is it now, 7 million new unemployed since the recession began?

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The way I heard it described

Someone on another site put it this way:

A guy jumps off a 30-story building. As he plunges towards the ground he picks up speed until he's going 110 mph. Then he sticks his arms out. The wind resistance from his arms slows him to "just" 95 mph.
The financial media takes this as a sign that he won't hit the ground.

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The REAL Unemployment figures

Nick Turse has an outstanding article on the real unemployment numbers. Makes for some interesting reading.

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A few hard numbers

April

Current unemployment = 13.7 million Americans

Discourged workers = 700,000

Marginally attached workers = 1.4 million people

Unemployed, underemployed or had given up looking for a job = 25 million

In the last year

Involuntary part-timers has increased by 4.9 million in the past year, according to a May study by the Federal Reserve Bank of Cleveland

Estimated total = 40,800,000

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And yet another opinion

Felix Salmon is quick to remind us how these unemployment improvements relate to the now infamous stress tests.

So, we're already one half or one full percentage appoint ahead of the stressful projections for this year and it's only thru 5 months AND the auto bankruptcy related losses haven't even begun. Makes one wonder where housing prices are eventually headed, especially in light of the rising mortgage rates. This Bear rally in the stock market is most definitely a sucker rally, IMO. We are not even close to hitting bottom in this recession. I think this is going to get ugly this Autumn.

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UE Projections

Zero Hedge has an article regarding the projection of the unemployment stats. Scary stuff!

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It's going to get worse before it gets better, a lot worse.

http://www.tomdispatch.com/post/175079

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