Posted on 03/04/2010 10:39:23 AM PST by Touch Not the Cat
With Wednesday's ADP report and Thursday's jobless claims data laying the groundwork for Friday's unemployment report, there's an intense focus on jobs from Wall Street to Washington D.C. and beyond.
But there's really only one jobs figure that matters, says John Lekas, senior portfolio manager for the $320 million Leader Short-Term Bond Fund: The U-6 or "real" unemployment number.
U6 is more important than the headline unemployment rate because it includes both the unemployed and "underemployed" workers faced with reduced hours who "still can't pay their bills," Lekas tells Aaron in the accompanying clip. "I think that's a more representative number."
More jobs weakness ahead. More bearish than most, Lekas sees the headline unemployment rate rising to 10% in February and climbing to 15% or 16% by mid-year. Even more dire, he sees the "real" unemployment figure surging to 25%.
Lekas says companies still are focused on cutting costs and jobs to protect their top and bottom lines. Plus, an in-house compilation of household data shows Americans are under water, with unpaid bills and expenses outpacing income by hundreds of dollars a month. That should keep consumer spending down, which means less sales for companies and, thus, less incentive for them to add to payrolls.
(Excerpt) Read more at finance.yahoo.com ...
Wow. Yahoo.
Doesn’t that mean we need higher taxes, more welfare and more harsh regulation of business??
U6 is what really matters, and it compares apples to oranges.
Expect the MSM to go above and beyond making excuses for Obama when the U6 number approaches 25%.
What is that chart?
Unemployment in the U.S. during the Great Depression was 25%, not 37%...correct?
Maybe worldwide it was 37%...
Everybody is forgetting THE ONE MILLION PEOPLE Obama intends to Temp hire for the Census.
And they stay hired until just after the 2010 election.
Imagine that, eh???
Good to see more articles about professional economists paying attention to the U6 vs U3 numbers. The more honest of us here at FR have been saying that for I'd say at least three years now.
"For each period [1980-1990, 1990-2000, and 2000-2005], we find that states with greater overall economic freedom have greater rates of employment growth. Generally, a one-unit increase in the economic freedom index (roughly equal to one standard deviation) increases employment growth by 1 to 4 percentage points depending on specification. In addition, roughly 2 to 5 percent of the variation in employment growth across the states is explained by economic freedom."
Texas is doing better than most. I think ND and neighboring states are doing well due to real energy exploration and production. The same thing is happening in areas in PA where there is nat gas in the one region.
Domestic energy production could recapitalize America, generate taxes, wealth and jobs.
"...Doesnt that mean we need higher taxes, more welfare and more harsh regulation of business???..."
You are precisely correct. You also keep beating me to the funny punchline! ;-)
Now more than ever we need taxes reduced to keep more money in citizen's pockets as they can spend it locally far better than government.
Business should feel free to expand without penalty, instead of feeling they will be crushed beneath more absurd corporate taxes.
I think this is something of an outlier. While the picture is grim and is not fully represented in the offical government numbers, official numbers climbing another 6 or 7 points by the end of this year is inconceivable.
High unemployment? Not a problem. It’s the Obama Plan. More people out of work means more people reliant on the government. This makes the statists happy. It’s why they get up in the morning and go off to THEIR job.
YAHOO is reporting on “real” unemployment figures??? And explaining that there is a such thing as a U-6 figure?
Where is that sign for the town of Hell with ice dripping off of it?
Do not worry about this stuff. Obama has lot’s of “shovel ready” jobs and as soon as he gets his Obamacare passed and our country committed to a few more trillion in dept, he’s leaving on an out of country trip to see if he can find where he misplaced them.
Well as long as we pay people so they don’t have to work, this will continue to go higher. What is it about welfare people don’t understand. The blacks are where they are because the “Great Society” put them back decades ... they still haven’t come out from under it ... yet they still vote for the people who did it to them. Amazing.
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