Posted on 07/08/2011 12:59:56 PM PDT by libertarian neocon
I wrote before that our unemployment rate is actually much higher than the reported rate, as millions of people have been statistically thrown out of the labor force. Given today's horrible jobs report, I felt it was time to update some of my calculations. First, you can see our labor force participation rate is at a 27-year low (the lowest since March of 1984), falling almost 2% since Obama was elected.
This is why the reported number looks lower than reality. By kicking people out of the labor force, a greater percentage look employed, or conversely, you can't be counted as unemployed if you aren't counted in the labor force.
So what happens if you assume a constant 66% labor force participation rate (it was at or above 66% since the late 1980's) since November 2008? Well, you get a much higher unemployment rate, as you see in the graph below, where the red line is the official rate while the blue line is what is probably the "real" rate.
In case you don't believe me and think I'm resorting to statistical shenanigans, check out the official employment-to-population ratio which is a statistic which does not account for the size of the labor force, just the total population over the age of 16.
These jobs numbers are disastrous and have nothing to do with the deficit talks, as Obama claimed. Nor will they be fixed by more infrastructure spending. As these charts show, the previous round of infrastructure based stimulus had almost no effect on employment in this country. It's really amazing how Obama really has nothing new to say or to propose on the subject of jobs creation, it's just always about helping out his union buddies and higher infrastructure spending.
Me thinks you are at the wrong site to be concerned with disbelievers LN.
I said “in case” :-)
Nice post. Thanks for putting the entire thing here. And welcome to FR.
We expected no different, even BEFORE he was elected. He is an America-hater and a Marxist. There is really nothing “capitalistic” or American about him. NOTHING.
So none of this should be a surprise. It is not, really.
I don’t think we have any real idea of what the actual unemployment numbers are in this Country. The previous month’s numbers are constantly being revised downward to the point that the statistics mean almost nothing in real time.
Just out of sheer curiosity, does anyone know what it costs to just to run the Department of Labor for a year...??
You’re right econjack. If you count those working part time or underemployed the rate is higher, but I actually just wanted to stick as closely to the official definition as possible since we are used to see the official number, not U-6, which you are talking about. Also, I don’t know if you know this website but its called Shadowstats. They take U-6 and also add long term discouraged workers, who havent been counted by the BLS since 1994. When you count them in, over 20% of Americans are unemployed or underemployed. Here is the link: http://www.shadowstats.com/alternate_data/unemployment-charts
I feel for people whose unemployment has run out and they can’t find a job. Sadly there will be even more people losing their jobs.
We’re going to see a lot more foreclosures in the future.
A house in my neighborhood sold a year ago for $119K. It’s on the market today at $89K. It’s a foreclosure. My $147,000 house is now worth about $134,000. That drop occured in 2 1/2 years.
The DOL spends about $12.8 billion a year. You can see their budget at http://www.dol.gov/dol/budget/2012/bib.htm
The only thing I can think of to counter this is that baby boomers are retiring, thus making the participation rate lower.
Yeah I’m not too optimistic about real estate going forward. Real estate prices are double dipping even though we have close to record low mortgage rates. When rates go back up and they will inevitably, prices should go down more as higher rates makes houses less affordable.
Also, there is an 18 month lag between the economy and real estate, typically (though this recession is anything but typical), if the economy and unemployment really double dips, things will be getting worse for a while.
Housing still is overpriced with the historical rise. By something around 50 percent.
That doesn’t take into account the decrease in demand associated with demographics. So, yeah. Not really where you want to be. I’m here waiting out the storm until prices fall to where I’m comfortable buying.
Inflation is KILLING ME ,, I went food shopping today ,, gassed up my car at $3.63/gallon (it was $3.41 within the last week!) and despite hitting 3 stores for the items I needed I paid 10-20% more on the items I needed most ,, meats and cereals AND THIS IS IN A MONTH OR SO... The generic cereals are now priced the same as the major brands were before the summer..
Youre right, boomer retirements could be a confounding variable. But still those retirements do mask how severe this downturn is. Think about it, we have the same number of people employed as we had in 2004, but 15 million more people over the age of 16.
America has had it good for far too long, and Barak Mugabi is making the correction.
LLS
Some of the baby boomer thing is real for sure.
When I retired, they split up my job.
Most places I’m familiar with the employees are working like rented mules because mgmt knows there is zero job mobility in today’s economy.
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