Archive for the ‘Unemployment’ Category

« Older Entries

Historical Perspective – Employment And Output

Monday, February 8th, 2010

Here are two charts from the Minneapolis Fed site:

http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm

They show, from a historical context, how declines in employment and output during this period of economic weakness (which FRB Minneapolis refers to as a recession) compare to those of previous recessions.

First, the employment chart.  Here are two notes regarding this chart:

1. Employment is nonfarm payroll employment calculated by the Bureau of Labor Statistics.
2. Postwar recessions include the 10 recessions as defined by the NBER that started between 1946 and 2006.

Second, the output chart.  A couple of notes regarding this chart:

1. Output is gross domestic product adjusted for inflation as calculated by the Bureau of Economic Analysis.
2. Postwar recessions include the 10 recessions as defined by the NBER that started between 1946 and 2006.

There are other pertinent notes on the FRB Minneapolis page, as seen below:

Background on Recession/Recovery in Perspective

This page places the current economic downturn and recovery into historical (post-WWII) perspective. It compares output and employment changes from the 2007-2009 recession and subsequent recovery with the same data for the 10 previous recessions and recoveries that have occurred since 1946.

This page provides a current assessment of ‘how bad’ the 2007-2009 recession was relative to past recessions, and of how quickly the economy is recovering relative to past recoveries. It will continue to be updated as new data are released. This page does not provide forecasts, and the information should not be interpreted as such.

The charts provide information about the length and depth of recessions, and the robustness of recoveries.

Post-WWII Recessions

The Business Cycle Dating Committee of the National Bureau of Economic Research determines the beginning and ending dates of U.S. recessions. http://www.nber.org/cycles.html
It has determined that the U.S. economy experienced 10 recessions from 1946 through 2006. The committee determined that the 2007-2009 recession began in December 2007. The ending date has not yet been determined. Ending dates are typically announced several months after the recession officially ends.
http://www.nber.org/cycles/dec2008.html

Length of Recessions

The 10 previous postwar recessions ranged in length from 6 months to 16 months, averaging about 10 1/2 months. The 2007-09 recession was almost certainly the longest recession in the postwar period. But the total length of the recession will only be known when the Business Cycle Dating Committee retrospectively determines the final month of the recession.

Depth of Recessions

The severity of a recession is determined in part by its length; perhaps even more important is the magnitude of the decline in economic activity. That is, how much do employment and output fall?

back to <home>

SPX at 1059.97 as this post is written

  • Share/Bookmark

Tags: ,
Posted in Uncategorized, Unemployment | Comments Off

The State of the Union Address – A Few Comments

Thursday, January 28th, 2010

I found plenty of noteworthy comments in last night’s State of the Union Address.   Here is the link to the transcript:

http://www.whitehouse.gov/the-press-office/remarks-president-state-union-address

Here are a couple of my thoughts:

First, many stimulus initiatives were mentioned.  Some of these were new ideas.  That stimulus ideas are proliferating should not be a surprise, as many in our country believe they represent a sensible solution to our many economic difficulties.   I will comment on many of these initiatives when more details are available and/or they are enacted.  For now, I will say that before we, as a nation, enact more stimulus bills, we need to analyze the results of the many stimulus efforts previously and currently enacted.  Then, we need to assess the unintended consequences and risks these stimulus efforts hold, of which I have previously mentioned on this blog.

Second, the employment situation was mentioned.  This, of course, is not a surprise and is a very popular topic among all politicians – and for very good reason.

President Obama during the speech last night made the following comment:

“But the truth is, these steps won’t make up for the seven million jobs that we’ve lost over the last two years.”

I believe that our unemployment problems, both current and ongoing, encompass a population many multiples of seven million.   Our unemployment problems will most likely not be solved by any easily enacted solution, unfortunately.

For those unaware, I previously wrote a series of blog posts on unemployment, can be found here:

http://www.economicgreenfield.com/2009/07/24/why-arent-companies-hiring/

back to <home>

SPX at 1086.85 as this post is written

  • Share/Bookmark

Tags: , ,
Posted in Intervention, Unemployment | Comments Off

Three Unemployment Charts

Tuesday, January 12th, 2010

Occasionally, I have posted charts concerning unemployment.  With Friday’s unemployment release, here are three charts that I find noteworthy:

First, from the St. Louis Fed site, the Median Duration of Unemployment. 

Second, from the CalculatedRisk blog of 1/8/10, Unemployed Over 26 Weeks:

http://www.calculatedriskblog.com/

Third, again from the CalculatedRisk blog of 1/8/10 – I like this chart as it presents a relative depiction of Post WWII recession job losses.  As one can see, our current period of economic weakness’s job losses are outsized both in duration and severity:

As depicted by these charts, our unemployment problem is severe.  Unfortunately, there does not appear to be any “easy” solutions.

A few months ago I wrote a series of blog posts titled “Why Aren’t Companies Hiring?” which can be found at this link:

http://www.economicgreenfield.com/2009/07/24/why-arent-companies-hiring/

back to <home>

SPX at 1141.18 as this post is written

  • Share/Bookmark

Tags: ,
Posted in Unemployment | Comments Off

Article On Detroit Unemployment

Wednesday, December 23rd, 2009

Below  is an article from The Detroit News of December 16 titled “Nearly half of Detroit’s workers are unemployed”. 

Among other things, Detroit’s economic situation seems to refute the theory, with which I vehemently disagree, that we as a nation do not “need” manufacturing in order to be successful.

http://detnews.com/article/20091216/METRO01/912160374

back to <home>
SPX at 1117.83 as this post is written
  • Share/Bookmark

Tags: ,
Posted in Unemployment | Comments Off

Ben Bernanke On Unemployment

Wednesday, November 18th, 2009

Ben Bernanke gave a speech on Monday at the Economic Club of New York.  Here is the link:

http://www.federalreserve.gov/newsevents/speech/bernanke20091116a.htm

I found his comments on unemployment to be noteworthy: 

Here are some excerpts:

“In addition to constrained bank lending, a second area of great concern is the job market. Since December 2007, the U.S. economy has lost, on net, about 8 million private-sector jobs, and the unemployment rate has risen from less than 5 percent to more than 10 percent.6 Both the decline in jobs and the increase in the unemployment rate have been more severe than in any other recession since World War II.7

Besides cutting jobs, many employers have reduced hours for the workers they have retained. For example, the number of part-time workers who report that they want a full-time job but cannot find one has more than doubled since the recession began, a much larger increase than in previous deep recessions. In addition, the average workweek for production and nonsupervisory workers has fallen to 33 hours, the lowest level in the postwar period. These data suggest that the excess supply of labor is even greater than indicated by the unemployment rate alone.”

also:

“The best thing we can say about the labor market right now is that it may be getting worse more slowly.”

also:

“As the recovery becomes established, however, payrolls should begin to grow again, at a pace that increases over time. Nevertheless, as net gains of roughly 100,000 jobs per month are needed just to absorb new entrants to the labor force, the unemployment rate likely will decline only slowly if economic growth remains moderate, as I expect.”

 

SPX at 1110.32 as this post is written

  • Share/Bookmark

Tags: ,
Posted in Ben Bernanke, Unemployment | Comments Off

Two Unemployment Charts

Monday, November 9th, 2009

The following chart is from the CalculatedRISK blog of November 8 http://www.calculatedriskblog.com/2009/11/summary-and-look-ahead.html

I like this chart as it presents a relative depiction of Post WWII recession job losses.  As one can see, our current period of economic weakness’s job losses are outsized both in duration and severity:

CR Employment during Recessions 11-6-09

 

Here is a long-term view of the official stated Unemployment Rate.  This chart is from the St. Louis Federal Reserve site.  I find this chart interesting for many reasons.  As one can see, our current official Unemployment Rate (U3) is second only to that of the early 80’s.  Also, one can see that although large spikes up in the Unemployment Rate are relatively common, in prior periods the spikes up were (relatively) quickly followed by a quick retreat:

UNRATE_11-6-09

 

I have written frequently about the Unemployment situation.  These blog posts can be found under the “Uncategorized” Category.  For those interested, here are a couple of the latest posts:

http://www.economicgreenfield.com/2009/10/30/another-note-on-unemployment-statistics/

http://www.economicgreenfield.com/2009/10/06/a-note-about-unemployment-statistics/

Furthermore, I wrote a blog series titled “Why Aren’t Companies Hiring?” that can be found listed on the Blog Series page here:

http://www.economicgreenfield.com/blog-series/

 

SPX at 1079.79 as this post is written

  • Share/Bookmark

Tags: ,
Posted in Unemployment | Comments Off

Another Note On Unemployment Statistics

Friday, October 30th, 2009

On October 6 I wrote about my thoughts regarding Unemployment Statistics.  That link can be found here:

http://www.economicgreenfield.com/2009/10/06/a-note-about-unemployment-statistics/

I recently ran across the following from John Mauldin, found in his October 23 “Thoughts From The Frontline” newsletter:

“With 9.8% unemployment, 7% underemployed (temporary), and another 3-4% off the radar screen because they are so discouraged they are not even looking for jobs, and thus are not counted as unemployed (who made up these rules?) …”

______

There are numerous aspects of the Unemployment situation that I find highly noteworthy.  If one assumes that the “true” Unemployment Rate is 20%, as per above, that in itself is outsized from a historical perspective.  One would have to look back to the worst period(s) of The Great Depression to see such (stated) Unemployment Rates.

Also, for all of the hardship this unemployment situation is causing, it doesn’t seem to be causing undue concern or focus.  Perhaps the vast majority has adopted the traditional view, one that economists routinely site, that Unemployment is a lagging indicator and thus the problem will improve as the purported economic recovery progresses.

Another facet of note is that the stock market valuation seems incredibly high when compared to the Unemployment Rate.  While this dichotomy may last temporarily, I would expect a definite “resolution” to close the gap. 

 
SPX at 1057.71 as this post is written
  • Share/Bookmark

Tags:
Posted in Unemployment | Comments Off

A Note About Unemployment Statistics

Tuesday, October 6th, 2009

From time to time, I will write posts that contain the Unemployment Rate or various other job loss measures.  I show these statistics as they are widely used and quoted by others. 

From my perspective, however, the methodology used to measure the various job loss and unemployment statistics does not provide an accurate depiction.  There are a variety of reasons for this that become evident if one carefully analyzes the unemployment calculations.

I feel that if one were to accurately gauge the Unemployment Rate, the rate would be at least 20%, which is roughly double the official Unemployment Rate of 9.8%.  This 20% figure is above the U6 measure of 17% that many have adopted as an accurate benchmark. 

What is bothersome is that even the official unemployment statistics that I show in the blog posts display a very worrisome situation.

 

SPX at 1054.65 as this post is written

  • Share/Bookmark

Tags: , ,
Posted in Unemployment | Comments Off

Another Chart Reflecting Job Losses

Monday, October 5th, 2009

I would like to present an interesting chart on job losses.  My last chart concerning job losses was posted on September 10.  The commentary I presented there is still highly applicable to the latest unemployment numbers.

This chart is from http://www.calculatedriskblog.com/ from October 2.  I like this chart as it presents a depiction of the relative severity of our current period of economic weakness vs. that of prior periods from both a “duration” and “extent” perspective:

CR EmploymentJobLossesRecessions 10-2-09

 

There should be no doubt that this unemployment situation is severe, especially in light of the fact that other employment/income options like starting one’s own business in this economic climate would be (very) difficult.

For those who haven’t yet read it, I wrote a blog series titled “Why Aren’t Companies Hiring?” that can be found on the “Blog Series” page listed on the right-hand side of the home page as well as at this link:

http://www.economicgreenfield.com/blog-series/

 

SPX at 1031.47 as this post is written

  • Share/Bookmark

Tags: ,
Posted in Unemployment | Comments Off

An Interesting Chart On Job Losses, Revisited

Thursday, September 10th, 2009

Here is an updated chart from chartoftheday.com that I have shown and discussed previously, in my July 7 post:

Chart of the Day Nonfarm Payrolls 9-4-09

http://www.chartoftheday.com/20090904.htm?T

There are other charts similar to this, from other sources…however, I find this chart particularly interesting as it incorporates the long-term averages of two other periods. 

As I wrote in my July 7 post:

“As one can see, the current degree of job losses is rather atypical.

I would also like to highlight another issue as well. From a historical perspective, this (purported) recession, that the NBER has classified as having started in December 2007, is getting “long in the tooth” from a historical perspective. The following blog post does a good job of summarizing how long recessions typically last:

http://www.calculatedriskblog.com/2009/06/update-what-is-depression.html

As one can see, from a historical standpoint the severity of the job losses, as well as the length of this (purported) recession are atypical. Both have persevered in the face of very large amounts of intervention, including stimulus efforts.

As I have written about previously, the above is yet more evidence that we may well be in a “new (economic) environment” – with the associated implications…”

SPX at 1031.85 as this post is written

  • Share/Bookmark

Tags: ,
Posted in Unemployment | Comments Off

« Older Entries