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HomeWhat is The Real Rate of Unemployment in the United States?
Posted by Larry Doyle on August 13th, 2010 8:06 AM |
Just what is the true rate of unemployment in our country? Our headline U-3 rate is currently 9.5%. Our U-6 rate, more broadly defined, is 16.5%.
Many people are aware of the differences between U-3 and U-6; however, renowned economist John Williams takes our analysis to an entirely new level. Williams is far ahead of the curve in his work.
William is likely not a regular on the Washington cocktail circuit. Why’s that? He goes far deeper in his work and exposes inconsistencies, if not worse, in government statistics. Let’s learn more about Williams and his work at Shadow Government Statistics:>>>> (more…)
Without Job Growth, Here Comes the “QE2″
Posted by Larry Doyle on August 6th, 2010 9:46 AM |
This morning’s Unemployment Report further confirms that our economy remains burdened by our Sense on Cents description of ‘walking pneumonia.’ While this month’s report was decidedly weaker than expectations, once again we witness downward revisions to prior reports. Do you find it strange that more often than not much of the economic data released has displayed this tendency to have downward revisions to prior reports. Think the data is heavily massaged? You think?
Let’s navigate this morning’s report thanks to The Wall Street Journal’s Market Data page: (more…)
Review of Unemployment Report July 2, 2010
Posted by Larry Doyle on July 2nd, 2010 9:19 AM |
The release of the Unemployment Report this morning is very much consistent with an economy that is undergoing real structural changes and adjusting to the realities of lessened credit and limited growth. As much as some may like to spin it one way or another, those realities are the simple and straightforward ’sense on cents’ views as we navigate our economic landscape. I do not envision these realities changing anytime soon.
A quick review:
1. The overall unemployment rate declined from 9.7% to 9.5% while the consensus expectation was for an increase to 9.8%. The underemployment rate declined from 16.6% to 16.5%. Are these positive developments? Nope. Why? The rates dropped as more people, in this case 652k workers, have given up looking for work and have exited the labor force. (more…)
Robert Reich: “No Jobs Recovery”
Posted by Larry Doyle on April 5th, 2010 8:29 AM |
Where is the jobs growth? If we listen to many in Washington or the general media, Friday’s employment report (indicating +162k in non-farm payroll) was a turning point in our labor markets. Was it really? Let’s listen to former Labor Secretary Robert Reich and get his take.
Although I have a decidedly different point of view than Reich on many economic and political topics, I do believe that Reich speaks from his heart and presents what he believes to be the truth as opposed to sugarcoating data to further promote a political agenda. (more…)
Unemployment Report: April 2, 2010
Posted by Larry Doyle on April 2nd, 2010 8:56 AM |
The widely anticipated April Unemployment Report covering the month of March was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
December: 10%
January: 10%
February: 10.1%
March: 9.7%
- April Consensus Expectation: 9.7 %
- April Actual: 9.7%
>> LD’s comments: as expected. More people who had given up looking for work have now reentered the labor force. This trend will keep pressure on the rate. The U-6, that is the underemployment rate inched higher to 16.9% from last month’s 16.8%. What about the long term unemployed? (more…)
White House Sees Elevated Unemployment for ‘Extended Period’
Posted by Larry Doyle on March 16th, 2010 11:43 AM |
Is the White House reading Sense on Cents?
While I ask that question in a self-effacing fashion, I will allow others to pass muster as to whether my commentary deserves attention in Washington. Why do I ask that question now though? I wrote this morning, “What Happened to Focus on Jobs?”:
The ‘talking points’ utilized by those in Washington project that our economy and markets are experiencing cyclical unemployment. I firmly believe they are wrong. Our economy and markets are experiencing structural unemployment.
Now it appears as if the White House ‘talking points’ have changed. (more…)
Unemployment Report: March 5, 2010
Posted by Larry Doyle on March 5th, 2010 9:59 AM |
The widely anticipated March Unemployment Report covering the month of February was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
August: 9.4%
September: 9.7%
October: 9.8%
November: 10.2%…revised to 10.1%
December: 10%
January: 10%
February: 10.1%
– March Consensus Expectation: 9.7-9.8%
- March Actual: 9.7%
>> LD’s comments: as expected. Not widely publicized is the fact that the U-6, that is the underemployment rate moved back up from 16.5% to 16.8%. Not trying to be intentionally pessimistic but merely trying to provide a full snapshot so we can navigate accordingly. (more…)
Unemployment Report: February 5, 2010
Posted by Larry Doyle on February 5th, 2010 8:58 AM |
The widely anticipated February Unemployment Report covering the month of January was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
August: 9.4%
September: 9.7%
October: 9.8%
November: 10.2%…revised to 10.1%
December: 10%
January: 10%
– February Consensus Expectation: 10.1%
- February Actual: 9.7%
>> LD’s comments: A fluke. A drop in the rate would typically be viewed as a positive, but then why didn’t we see job growth? Today’s report indicates that a lot of people have given up looking for work, thus shrinking the overall labor pool. The U-6 (the underemployment rate) is now 16.5%. Better? Don’t be fooled. I think it is again more an indication that people are exiting the labor force overall. (more…)
Unemployment Report: December 4, 2009
Posted by Larry Doyle on December 4th, 2009 8:57 AM |
The widely anticipated December Unemployment Report covering the month of November was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
August: 9.4%
September: 9.7%
October: 9.8%
November: 10.2%
- December Consensus Expectation: 10.2%
- December Actual: 10.0% !!
>> LD’s comments: Discouraged workers did increase and exit the labor pool. That fact supported this improvement. Initial reaction to the report remains one of disbelief and skepticism. The underemployment rate (U-6 rate) improved to an overall level of 17.2%.
II. NON-FARM PAYROLL (click here for definition of this term)
July: loss of 463k
August: loss of 304k
September: loss of 154k
October: loss of 219k
November: loss of 190k
- December Consensus Expectation: loss of 100k to 125k
- December Actual: loss of 11k!!
>> LD’s comments: positive revisions to the previous two months of 159k. A major surprise. Along with the positive revisions, do not be surprised to see many analysts tout this as the turn in the economy and the fact that government programs are working. We will need more than one month’s report to confirm that. (more…)
Jobs is Job #1
Posted by Larry Doyle on November 30th, 2009 9:34 AM |
“Kiss me!!”
“What?”
That’s right, I said, “Kiss me!!”
Many a businessman is familiar with the basic principle of “kiss me,” that is “Keep It Simple, Stupid.”
Regrettably, Washington is not familiar with that simplest of business principles. Legislative bills that run into the thousands of pages and admittedly go unread by our lawmakers prior to vote are often an unmitigated disaster for American business. How so?
These bills create an environment of uncertainty. What do business leaders do when they’re unsure of what is coming out of Washington and how it might impact their business? “When in doubt, wait it out.”
I witness increasing evidence of this basic business dynamic and believe it will be on full display this coming Thursday. What will happen Thursday? President Obama is hosting a Jobs Summit in Washington. Sounds like a reasonable idea given the domestic employment situation is so bad and getting worse, despite assertions to the contrary by a number of public officials and economists.
How convenient that the summit is being held Thursday. Why? This summit will provide plenty of photo ops and media coverage highlighting that Washington is hard at work addressing the employment situation right before the monthly unemployment report is released on Friday morning. Do not think for a second that the timing of this summit was not strategically scheduled to negate the negative impact of another weak report. (more…)
