7 ms·

Unemployment Rate 7.2%

37 points by kp212 18y ago

steveplace 18y ago
And to be the contrarian: The NFP is Meaningless http://www.ritholtz.com/blog/2009/01/counter-intuitive-nfp/ http://www.ritholtz.com/blog/2009/01/counter-intuitive-nfp/
- jbarciauskas 18y ago
  The author is absolutely right - we knew this was coming. Another item he might have mentioned to bolster his claim is that there are other unemployment related statistics that are more meaningful than this one, commonly referred to as the "headline" number. In fact, I googled as I was writing this post and found he addressed this 6 months ago, and made exactly the same case I'm about to make- the U3 number that is the "headline" number should be ignored, and we should focus attention on the U6 number. (http://www.ritholtz.com/blog/2008/06/unemployment-reporting-a-modest-proposal-u3-u6/ http://www.ritholtz.com/blog/2008/06/unemployment-reporting-...) A quick synopsis of the U6 measurement from his post: "U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule)." He also links to a nice chart: http://bigpicture.typepad.com/photos/uncategorized/2008/06/06/alternative_measures_of_labor_under.png http://bigpicture.typepad.com/photos/uncategorized/2008/06/0...
  - yummyfajitas 18y ago
    Just a minor nit: if a marginally attached worker looked for work, he would be unemployed. "Unemployed" == "Not working but looking for work." "Marginally attached" == "kinda wants a job, but not enough to actually look for one."
jbrun 18y ago
I never understood American unemployment numbers. Many countries operate fine with far higher unemployment numbers. Canada was at 7 or 8% for many years, France is often around 10%. Also, I remember reading an article that talked about the vast number of people who are excluded from the American data. People in prisons for example - 2 million people. There are also people who do not file unemployment claims or are ineligible to do so because of much higher restrictions in the US compared to more liberal societies. Therefore, US unemployment figures are always about 2% too low, but it is one of these 'psychological' stimulus the government gives. If our unemployment rate is near 0, then economy must be doing great! Please correct me if I am wrong.
- ivankirigin 18y ago
  You're correct. The US only counts those looking for work.
  - neilc 18y ago
    AFAIK, everyone only counts those who are actively looking for work but can't find it: that's what the "unemployment rate" means. http://en.wikipedia.org/wiki/Unemployment http://en.wikipedia.org/wiki/Unemployment
    - ivankirigin 18y ago
      No, people that don't have jobs but aren't seeking them are not counted in the US.
      - neilc 18y ago
        Right, but they aren't typically counted anywhere else, either. Did you read even the first sentence of the WP article?
        ivankirigin 18y ago
        The first sentence doesn't address differences in measurement, but I appreciate the snark. I've read that Europe measures more than those that are seeking, meaning they overestimate (or the US underestimates) unemployment. Scrolling down, the EU measure looks like the US measure, so maybe things changed since I heavily head econ blogs. Perhaps you can read more than the first line of some other resources and report back on the change?
villageidiot 18y ago
The unemployment rate for IT workers is still closer to 2% according to an article I read somewhere recently (sorry, don't have the reference).
pchristensen 18y ago
Greenspun sliced up the unemployment numbers and got 9.1% Unemployment statistics were redefined starting in the early 1960s by the Kennedy Administration. First they took out the "discouraged", people who wanted a job, but had stopped looking. Under the Reagan Administration, the workforce was expanded by adding in members of the U.S. military, who were by definition "employed", thus shrinking the percentage of "unemployed". The Clinton Administration reduced the number of households sampled from 60,000 to 50,000 and "a disproportionate number of the dropped households were in the inner cities." Phillips doesn’t talk about prisoners, but we have greatly increased our prison population, most of those incarcerated are working-age men, and none are counted in the workforce. Phillips claims that "Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent." [Poking around at http://www.bls.gov/cps/ http://www.bls.gov/cps/ reveals that, in 2007, 146 million of us were working, 7 million were unemployment, and 4.7 million were classified as not in the workforce but "wanted a job"; an additional 2.3 million Americans were in prison, presumably due to their energetic work habits in illegal trades. The "U-6" series, published by the BLS but almost never reported by newspapers, shows an unemployment rate right now of 9.1 percent.] http://blogs.law.harvard.edu/philg/2008/04/23/cooking-gdp-unemployment-and-inflation-numbers/ http://blogs.law.harvard.edu/philg/2008/04/23/cooking-gdp-un...
- anamax 18y ago
  > Phillips doesn’t talk about prisoners, but we have greatly increased our prison population, most of those incarcerated are working-age men, and none are counted in the workforce. Many prisons have inmates who work at various jobs. Should those jobs count? If not, why should we count folks in prisons?
  - thomasmallen 18y ago
    I don't think that prisoners should be counted simply because they are incapable of finding real employment. It's despicable that the prisons only pay between a nickel and a quarter for an hour's labor. Worse yet is the private prison system that is funded by the government but can sell goods manufactured by what is, essentially, an enslaved people. For this reason, those two million Americans cannot be considered as part of the real workforce, as their labor is essentially free.
vaksel 18y ago
Those numbers are absolutely meaningless, since they count a $70K/yr job, in the same category as a $7/hr burger flipper. You can take that 7.2%, and pretty much double it for all the people who got fired, and had to take a job paying half of what they used to make.
- dfranke 18y ago
  That's okay, as long that effect is roughly equal in every period of increasing unemployment. This and many other factors make it meaningless to treat unemployment additively, e.g. to say that 8% unemployment is "twice as bad" as 4%, but it doesn't diminish the number's comparative value, telling us whether we're better or worse off than before.
jmatt 18y ago
I'm interested in seeing how the unemployment numbers break out. In the recent past, unemployment amongst people with a Bachelor's degree or better is about 2.2%^. So nearly zero. I'd imagine, though I'm not sure, that most people on HN have a bachelor's or better and thus most of us are at a lesser risk of unemployment than others. I think when this number changes we will know it's fundamentally different from other recessions that we've had in the last 30 years. It's the rest of the population that takes the brunt of the economic downturn. Recently there has been reverse immigration, people leaving the US^^. And most of the people that are being hurt by unemployment don't have proper skill sets to just get another job. I know a number of internationals working in the US and they are all still employed and in demand. Most people think that people on Visas are at risk. In fact I think there are plenty of jobs for the well qualified. Most of the professional Visa / Green card holders in the US got here because they were uniquely qualified - and that doesn't change with an economic downturn. There is, especially from my perspective, still continued demand for good IT people and good programmers^^^. Against popular belief but understood here at HN; not all programming jobs are outsourced. But many high schoolers and their parents believe this, so there are less people going into tech. This, of course, is good news for those of us who are already in tech. It also does a great job protecting us from economic downturns compared to other fields. The WSJ, as usual, is out to sensationalize business as much as possible. I like the WSJ and read it regularly. I try to take it with a grain of salt. They'd like to have you believe the economy will never turn around. Because then when it DOES turn around it'll be great, new and unexpected news. In the end it's all about page loads or papers sold after all. ^ http://www.bls.gov/emp/emptab7.htm http://www.bls.gov/emp/emptab7.htm ^^ http://latinobusinessreview.blogspot.com/2008/12/hispanic-immigrants-leaving-us.html http://latinobusinessreview.blogspot.com/2008/12/hispanic-im... ^^^ Reported by the ACM so take it for what it is... http://www.cio.com/article/466228/IT_Careers_Expected_to_Survive_Global_Economic_Storm_in_?source=nlt_ciocareers http://www.cio.com/article/466228/IT_Careers_Expected_to_Sur... and http://www.networkworld.com/newsletters/edu/2008/120108ed1.html?hpg1=bn http://www.networkworld.com/newsletters/edu/2008/120108ed1.h... [EDIT: Formatting, and some additions ;-)]
malekov 18y ago
I'm Spanish. Look at the Unemployment in my country: http://img.elblogsalmon.com/2009/01/paro_dic.JPG http://img.elblogsalmon.com/2009/01/paro_dic.JPG 11.3% now. In 2005, 80% of ALL new Jobs in the E.U. were created in Spain due to the Real State Bubble (similar to Japan's-UK's-USA's one). Now we are facing two crisis at the same time: international credit crisis and post real state bubble crisis...
nazgulnarsil 18y ago
keynes created the fetish of full employment.
- eru 18y ago
  Sources?
  - nazgulnarsil 18y ago
    have you read the General Theory of Employment Interest and Money? directly from the book: "THE outstanding faults of the economic society in which we live are its failure to provide for full employment" -from the chapter: Concluding Notes on the Social Philosophy towards which the General Theory might Lead Keynesian economics focuses on full employment and income distribution as the primary failings of classical economics. In attempting to address these two non-problems keynes introduced blatant scientism into economic discourse.
    - eru 18y ago
      I know that Keynes cares a lot about full employment. But you said he introduced it as a concern. Do you have sources that nobody cared about it before?
      - nazgulnarsil 18y ago
        the only pre-keynes material I have been able to find is keynes' ideological predecessor Jeremy Bentham. Keynes is the one who popularized the approach and introduced policies that were actually adopted by government. control over monetary expansion to the degree that is required wasn't possible until the Federal Reserve was established. When I say that keynes created the fetish of full employment, I mean that post-keynes it was a continuing concern of government, whereas pre-keynes it had not been.
        eru 18y ago
        Thanks!
lsc 18y ago
now is the time to hire. You can pick up some good deals. Right now, especially with the 'just out of college' crowd, and if it's like the last downturn, in a year or two you will be able to find good people who got discouraged and did retail work for a while.

37 points by kp212 18y ago

And to be the contrarian: The NFP is Meaningless http://www.ritholtz.com/blog/2009/01/counter-intuitive-nfp/ http://www.ritholtz.com/blog/2009/01/counter-intuitive-nfp/

jbarciauskas 18y ago
The author is absolutely right - we knew this was coming. Another item he might have mentioned to bolster his claim is that there are other unemployment related statistics that are more meaningful than this one, commonly referred to as the "headline" number. In fact, I googled as I was writing this post and found he addressed this 6 months ago, and made exactly the same case I'm about to make- the U3 number that is the "headline" number should be ignored, and we should focus attention on the U6 number. (http://www.ritholtz.com/blog/2008/06/unemployment-reporting-a-modest-proposal-u3-u6/ http://www.ritholtz.com/blog/2008/06/unemployment-reporting-...) A quick synopsis of the U6 measurement from his post: "U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule)." He also links to a nice chart: http://bigpicture.typepad.com/photos/uncategorized/2008/06/06/alternative_measures_of_labor_under.png http://bigpicture.typepad.com/photos/uncategorized/2008/06/0...
- yummyfajitas 18y ago
  Just a minor nit: if a marginally attached worker looked for work, he would be unemployed. "Unemployed" == "Not working but looking for work." "Marginally attached" == "kinda wants a job, but not enough to actually look for one."

jbrun 18y ago

I never understood American unemployment numbers. Many countries operate fine with far higher unemployment numbers. Canada was at 7 or 8% for many years, France is often around 10%. Also, I remember reading an article that talked about the vast number of people who are excluded from the American data. People in prisons for example - 2 million people. There are also people who do not file unemployment claims or are ineligible to do so because of much higher restrictions in the US compared to more liberal societies. Therefore, US unemployment figures are always about 2% too low, but it is one of these 'psychological' stimulus the government gives. If our unemployment rate is near 0, then economy must be doing great! Please correct me if I am wrong.

ivankirigin 18y ago
You're correct. The US only counts those looking for work.
- neilc 18y ago
  AFAIK, everyone only counts those who are actively looking for work but can't find it: that's what the "unemployment rate" means. http://en.wikipedia.org/wiki/Unemployment http://en.wikipedia.org/wiki/Unemployment
  - ivankirigin 18y ago
    No, people that don't have jobs but aren't seeking them are not counted in the US.
    - neilc 18y ago
      Right, but they aren't typically counted anywhere else, either. Did you read even the first sentence of the WP article?
      - ivankirigin 18y ago
        The first sentence doesn't address differences in measurement, but I appreciate the snark. I've read that Europe measures more than those that are seeking, meaning they overestimate (or the US underestimates) unemployment. Scrolling down, the EU measure looks like the US measure, so maybe things changed since I heavily head econ blogs. Perhaps you can read more than the first line of some other resources and report back on the change?

villageidiot 18y ago

The unemployment rate for IT workers is still closer to 2% according to an article I read somewhere recently (sorry, don't have the reference).

pchristensen 18y ago

Greenspun sliced up the unemployment numbers and got 9.1% Unemployment statistics were redefined starting in the early 1960s by the Kennedy Administration. First they took out the "discouraged", people who wanted a job, but had stopped looking. Under the Reagan Administration, the workforce was expanded by adding in members of the U.S. military, who were by definition "employed", thus shrinking the percentage of "unemployed". The Clinton Administration reduced the number of households sampled from 60,000 to 50,000 and "a disproportionate number of the dropped households were in the inner cities." Phillips doesn’t talk about prisoners, but we have greatly increased our prison population, most of those incarcerated are working-age men, and none are counted in the workforce. Phillips claims that "Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent." [Poking around at http://www.bls.gov/cps/ http://www.bls.gov/cps/ reveals that, in 2007, 146 million of us were working, 7 million were unemployment, and 4.7 million were classified as not in the workforce but "wanted a job"; an additional 2.3 million Americans were in prison, presumably due to their energetic work habits in illegal trades. The "U-6" series, published by the BLS but almost never reported by newspapers, shows an unemployment rate right now of 9.1 percent.] http://blogs.law.harvard.edu/philg/2008/04/23/cooking-gdp-unemployment-and-inflation-numbers/ http://blogs.law.harvard.edu/philg/2008/04/23/cooking-gdp-un...

anamax 18y ago
> Phillips doesn’t talk about prisoners, but we have greatly increased our prison population, most of those incarcerated are working-age men, and none are counted in the workforce. Many prisons have inmates who work at various jobs. Should those jobs count? If not, why should we count folks in prisons?
- thomasmallen 18y ago
  I don't think that prisoners should be counted simply because they are incapable of finding real employment. It's despicable that the prisons only pay between a nickel and a quarter for an hour's labor. Worse yet is the private prison system that is funded by the government but can sell goods manufactured by what is, essentially, an enslaved people. For this reason, those two million Americans cannot be considered as part of the real workforce, as their labor is essentially free.

vaksel 18y ago

Those numbers are absolutely meaningless, since they count a $70K/yr job, in the same category as a $7/hr burger flipper. You can take that 7.2%, and pretty much double it for all the people who got fired, and had to take a job paying half of what they used to make.

dfranke 18y ago
That's okay, as long that effect is roughly equal in every period of increasing unemployment. This and many other factors make it meaningless to treat unemployment additively, e.g. to say that 8% unemployment is "twice as bad" as 4%, but it doesn't diminish the number's comparative value, telling us whether we're better or worse off than before.

jmatt 18y ago

I'm interested in seeing how the unemployment numbers break out. In the recent past, unemployment amongst people with a Bachelor's degree or better is about 2.2%^. So nearly zero. I'd imagine, though I'm not sure, that most people on HN have a bachelor's or better and thus most of us are at a lesser risk of unemployment than others. I think when this number changes we will know it's fundamentally different from other recessions that we've had in the last 30 years. It's the rest of the population that takes the brunt of the economic downturn. Recently there has been reverse immigration, people leaving the US^^. And most of the people that are being hurt by unemployment don't have proper skill sets to just get another job. I know a number of internationals working in the US and they are all still employed and in demand. Most people think that people on Visas are at risk. In fact I think there are plenty of jobs for the well qualified. Most of the professional Visa / Green card holders in the US got here because they were uniquely qualified - and that doesn't change with an economic downturn. There is, especially from my perspective, still continued demand for good IT people and good programmers^^^. Against popular belief but understood here at HN; not all programming jobs are outsourced. But many high schoolers and their parents believe this, so there are less people going into tech. This, of course, is good news for those of us who are already in tech. It also does a great job protecting us from economic downturns compared to other fields. The WSJ, as usual, is out to sensationalize business as much as possible. I like the WSJ and read it regularly. I try to take it with a grain of salt. They'd like to have you believe the economy will never turn around. Because then when it DOES turn around it'll be great, new and unexpected news. In the end it's all about page loads or papers sold after all. ^ http://www.bls.gov/emp/emptab7.htm http://www.bls.gov/emp/emptab7.htm ^^ http://latinobusinessreview.blogspot.com/2008/12/hispanic-immigrants-leaving-us.html http://latinobusinessreview.blogspot.com/2008/12/hispanic-im... ^^^ Reported by the ACM so take it for what it is... http://www.cio.com/article/466228/IT_Careers_Expected_to_Survive_Global_Economic_Storm_in_?source=nlt_ciocareers http://www.cio.com/article/466228/IT_Careers_Expected_to_Sur... and http://www.networkworld.com/newsletters/edu/2008/120108ed1.html?hpg1=bn http://www.networkworld.com/newsletters/edu/2008/120108ed1.h... [EDIT: Formatting, and some additions ;-)]

malekov 18y ago

I'm Spanish. Look at the Unemployment in my country: http://img.elblogsalmon.com/2009/01/paro_dic.JPG http://img.elblogsalmon.com/2009/01/paro_dic.JPG 11.3% now. In 2005, 80% of ALL new Jobs in the E.U. were created in Spain due to the Real State Bubble (similar to Japan's-UK's-USA's one). Now we are facing two crisis at the same time: international credit crisis and post real state bubble crisis...

nazgulnarsil 18y ago

keynes created the fetish of full employment.

eru 18y ago
Sources?
- nazgulnarsil 18y ago
  have you read the General Theory of Employment Interest and Money? directly from the book: "THE outstanding faults of the economic society in which we live are its failure to provide for full employment" -from the chapter: Concluding Notes on the Social Philosophy towards which the General Theory might Lead Keynesian economics focuses on full employment and income distribution as the primary failings of classical economics. In attempting to address these two non-problems keynes introduced blatant scientism into economic discourse.
  - eru 18y ago
    I know that Keynes cares a lot about full employment. But you said he introduced it as a concern. Do you have sources that nobody cared about it before?
    - nazgulnarsil 18y ago
      the only pre-keynes material I have been able to find is keynes' ideological predecessor Jeremy Bentham. Keynes is the one who popularized the approach and introduced policies that were actually adopted by government. control over monetary expansion to the degree that is required wasn't possible until the Federal Reserve was established. When I say that keynes created the fetish of full employment, I mean that post-keynes it was a continuing concern of government, whereas pre-keynes it had not been.
      - eru 18y ago
        Thanks!

lsc 18y ago

now is the time to hire. You can pick up some good deals. Right now, especially with the 'just out of college' crowd, and if it's like the last downturn, in a year or two you will be able to find good people who got discouraged and did retail work for a while.