Unemployment falls below 9%

Metrics, schmetrics. One could look at the civilian employed/population ratio. Regardless of whether people want a job (which is determined in part by how hard it is to find one and what the competing alternatives are), this probably better measures a good bit about how the burden of supporting the economy is shared, and thus how easy it is to support the economy (ex capital asset growth, net exports, other stuff.)

And no it doesn't measure hours worked, hourly earnings, part time/full time or anything like that.

And I didn't put the Y-axis origin at 54%, the St Loius Fed did--call them lairs with stats not me :)

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http://research.stlouisfed.org/fred2/series/EMRATIO
 
lomiller said:
But participation rates don’t measure how many people have jobs
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Ziggurat said:
It's a fractional measure, but that's exactly what it measures.
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No, the participation rate is the labour force as a fraction of the civilian population. And the labour force is [people with jobs] + [people not in jobs but want to be]
Dept of Labor (no link) said:
Labor force comprises all persons classified as employed or unemployed in accordance with the following criteria: job losers, persons on temporary layoff and permanenet job losers, whose employment ended voluntarily and who began looking for work; job leavers, persons who quit and immediately began looking for work; persons who completed temporary jobs and began looking for work after the jobs ended; reentrants who previously worked but were out of the labor force prior to beginning their job search; new entrants, those who have never worked.
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Francesca R said:
No, the participation rate is the labour force as a fraction of the civilian population. And the labour force is [people with jobs] + [people not in jobs but want to be]
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That's what I've been saying.

Adding the employed and the unemployed together can't tell you anything about the unemployment rate.
 
SezMe said:
What is an education bubble?
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Same thing as a real estate bubble: we're overinvested in something which won't give us the returns we're hoping for. And it's driven largely by the same thing as well: too many loans which shouldn't have been made. But unlike the real estate bubble, the loans are not dischargeable in bankruptcy.
 
Weekly jobless claims continue to be encouraging.

Jobless Claims Drop By 15,000

The number of Americans who filed first-time claims for jobless benefits dipped to 358,000 last week, down by 15,000 from a revised 373,000 from the week before, the Employment and Training Administration just reported.

At 358,000, claims were the lowest they've been since March 2008.

The "four-week moving average" number of claims was "366,250, a decrease of 11,000 from the previous week's revised average of 377,250."
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If you don't normally follow these numbers, less than 400,000 is considered a good sign. Every week hundreds of thousands of people lose their jobs and hundreds of thousands of people are hired. The weekly jobless claims is only one side of that, but lower it is, the more likely that more jobs are being created than lost. Expect ups and downs from week to week, but if the four-week average stays around where it is now, it's a good sign that next month's unemployment report will also be strong.
 
The Washington Post Fact Checker has an article about the "U-6" measure of unemployment that takes into account people who have given up looking for jobs and people who have part time jobs but would like to have full time jobs.

The bottom line is that unemployment is edging downward no matter what measurement you use.

Here is a chart from the BLS comparing the recent numbers for alternative measurements for unemployment.

-Bri
 
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Ziggurat said:
Same thing as a real estate bubble: we're overinvested in something which won't give us the returns we're hoping for. And it's driven largely by the same thing as well: too many loans which shouldn't have been made. But unlike the real estate bubble, the loans are not dischargeable in bankruptcy.
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The rate of graduations in the US is well below that of other developed countries. It's not an education bubble, it's a mismanagement (really lack of management, leaving it to the free market) of majors bubble.
 
Tricky said:
Really? Then why is it that a stock-market plunge is what always precedes a recession, including the last one? I agree that the stock market is only one indicator the health of an economy, but most economists will agree, it's a pretty important one.
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I'm re-replying to this because I left out a more important aspect of the disconnect between stocks and the status of the real economy. One that has nothing to do with the other issues of fraud and manipulation.

Stocks prices, even when honestly determined, are based on stockholder valuations of the company's immediate status, not the real state of the economy.

Example: XYZ Corp lays off 100,000 people, even though they are profitable. As a result their profit/loss statements look better and they are rewarded with a higher share price by "investors".

But what has XYZ Corp actually done? They've destroyed the ability to consume for 100,000 individuals and/or families. Those lost jobs result in lost business for every business that serviced those 100,000 individuals/families, forcing them in turn to lay people off. Rinse, repeat over and over.

That's NOT good for the real economy, the economy that distributes needed resources to allow people to live. Laying off workers, even if needed (and many layoffs are NOT needed, but rather designed to "increase profits"), is always a bad economic indicator.

Before the Marketeers start harping about the inevitability of layoffs and "creative destructions" and all that theoretical stuff, I know that a certain amount of "churn" is expected and unavoidable. That doesn't make it good, nor does it mean we need more of it.

Producers need people with incomes to consume their produce. That's one of the reasons why the US is so frakked right now. We've eliminated the ability of too many consumers to consume and we wonder why producers have no business coming in.
 
JoeTheJuggler said:
The unemployment rate was accurate enough when it came to criticizing Obama for his failed prediction that it wouldn't reach 10%, (but now it's not good enough.
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Not really, and many people (such as the people behind ShadowStatistics) were pointing it out at the time, but no one was listening because it wasn't in their political interests to do so.

The stock market used to be considered a good gauge of investment conditions, but now it's not.
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Again, not really, which is the point. People thought it was a good gauge of conditions, but that market was all bubbles and manipulation, and it fell apart as inevitably it must.
 
Corsair 115 said:
Except when its well-paid workers elsewhere whose jobs are outsourced to the U.S. See the case of Electro-Motive (owned by Caterpillar) in London, Ontario.
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The Canadians would disagree that that was good for their economy, regardless of the effect on stock prices.

Ultimately the world economy as a whole is hurt by "race to the bottom" tactics like this, regardless of whether we are on the "harm" end or the "benefit" end in the immediate term.
 
JoeTheJuggler said:
Yep. As I pointed out, the first thing you do to figure the labor force participation rate is to add together the employed and unemployed.

On top of that, the trend of good news only goes back a few months. That we haven't improved in a 10 year trend is beside the point.

I just heard a commentator on NPR making much the same point a couple of us have made: many of the people now out of the labor force are going back to school (trade school, traditional school or otherwise). When we come out of this, we'll have a better labor force.
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Until THOSE jobs are snatched away in the name of increased short term profits and the process starts all over again. If they can find a job at all as the market for those new jobs will be flooded with applicants.
 
Bri said:
Not in this case. The labor participation rate can't be used to determine the number of people who have given up looking for a job, therefore it sheds very little light on how the unemployment rate is affected by people who have given up looking for a job.

-Bri
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That is exactly WRONG.

The LPR is VITAL to properly understanding the UE rate, and how it portrays the economy.

Lets say that we have an economy of 100 workers (simplified number for purpose of clarity), and a UE rate of 10%. That means that at any given time 10% of the workforce is out of work, in this case 10 workers.

Now, conditions become SO bad that 10 people drop out of the Labor market entirely.

Now we have an economy of 90 workers and a 10% UE rate (now 9 workers).

Looking solely at the UE rate, one would think that things were stable. But they're not. You have an effective UE rate of 19%. 9 workers out of work that may or may not be able to find a new job, and 10 workers who have been entirely unable to find one at all and who have given up.

That economy is demonstrably worse off than the theoretical 10% UE figure would indicate. Those Forgotten 10 still have to eat, find shelter, etc. They don't cease to exist, just because the statistics no longer count them.
 
SezMe said:
What is an education bubble? Is that what you are talking about in #309?
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More and more people are turning to HE in hopes of improving their job prospects. The problem is that "high skill/education" jobs are never needed in the amounts we require to effectively reduce UE.

Put another way: we don't need 8+ million new doctors, lawyers, computer programmers, etc. There isn't enough work for that many, and never will be.

That's why increasing numbers of freshly graduated college kids are flipping burgers (if they can even find that).
 
Muldur said:
Lets say that we have an economy of 100 workers (simplified number for purpose of clarity), and a UE rate of 10%. That means that at any given time 10% of the workforce is out of work, in this case 10 workers.

Now, conditions become SO bad that 10 people drop out of the Labor market entirely.

Now we have an economy of 90 workers and a 10% UE rate (now 9 workers).
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But let's say that instead, 10 people decide to go to college or stay home with their kids or take care of their aging parents for reasons that have absolutely nothing to do with the economy. They still drop out of the labor market, but for entirely different reasons. It cannot be determined how many people dropped out of the labor force because they have given up looking for jobs and how many dropped out for other reasons.

-Bri
 
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