4 ms·

Unemployment rate 10.2%

32 points by kp212 17y ago

jamesbressi 17y ago
No one get upset over the problematic math behind the unemployment rate. Even when I took economics in university and we got on this topic, our professor said that it is a very flawed number for such a numerous amount of reasons, but until the government adopts a better way of substantiating, view it as nothing more than a number that may or may not help you gauge the economic climate. In other words, there is some benefit in understanding our situation with this surveyed number, but you should always question it and the media and government will use it how they please for their own agendas. The debate on the unemployment rate is very interesting; Google it if you have time and read up.
- jeromec 17y ago
  It's still a useful number as long as it's measured consistently. It may not be a verbatim reflection of worker to full employment, for example, since it doesn't count "under employed" or the people that want to work more hours, but can't. However, if we know that the 10% it represents is more than triple what we might consider normal then it can be a telling gauge.
  - RyanMcGreal 17y ago
    There's still a problem: when the unemployment rate starts to fall six months or a year after it spikes, that in itself tells you nothing about whether people are exiting unemployment because they've found jobs or because they've given up looking.
    - natevc2 17y ago
      You could make the unemployment number get "better" by convincing people that they shouldn't try to find a job because the market is so bad. That is why a lot of people look at the payroll report at the same time. But the payroll report usually comes with large revisions.
    - yummyfajitas 17y ago
      Unemployment does not tell you this, but discouraged workers does. http://www.bls.gov/news.release/empsit.t13.htm http://www.bls.gov/news.release/empsit.t13.htm There are 808,000 such people (as of october), up from 484,000 in october 2008.
      - fnid 17y ago
        Interesting. If you look at those numbers, the amount of people who used to work more is also declining, meaning people aren't earning as much as they used to from more than one job.
  - stumm 17y ago
    If you include discouraged workers (ie. people who aren't looking for work) the rate is actually 17.5%. http://www.bls.gov/news.release/empsit.t12.htm http://www.bls.gov/news.release/empsit.t12.htm
  - btilly 17y ago
    It's still a useful number as long as it's measured consistently. Unfortunately it is not measured consistently over long periods of time.
    - dsplittgerber 17y ago
      The government in Germany some years ago messed around with the data and the data set until all appeared well and some parts of the unemployed population - apparantly mostly the long-time unemployed, who have no motivation left to ever leave the welfare benefits system to work again - were just dropped from the data set. Recognize that unemployment data is a government tool. It's one of many interesting data points for one's analysis of the economic situation, but by itself it's pretty meaningless as it's not consistently measured over time.
    - Perceval 17y ago
      Here's an excellent article detailing how the government over the past 40 years or so has been changing the measurements of our basic economic indicators: http://harpers.org/archive/2008/05/0082023 http://harpers.org/archive/2008/05/0082023
  - yummyfajitas 17y ago
    It's very true that the time series Unemployment does not count involuntary part time workers. However, the time series Involuntary Part Time Workers does count people who want to work more hours but can't. The BLS tracks both these numbers. http://www.bls.gov/news.release/empsit.t05.htm http://www.bls.gov/news.release/empsit.t05.htm I think half the criticism of the unemployment number is simply because people wish one number could explain everything, but unemployment does not.
- RyanMcGreal 17y ago
  Judging unemployment via the unemployment rate is a bit like judging your website's popularity via Alexa. The question becomes: is lousy data better or worse than no data?
  - fnid 17y ago
    It's not no data. There are lots of data points to use, it's the choice of exactly which data points to use that is in question. The same debate rages over inflation as well. The issue is who is and who isn't included in the definition of unemployed. The truth is, if you don't have a job and you need one, but you've given up your search, you're still unemployed.
    - sophacles 17y ago
      Further how do we count people who are underemployed? For instance, software developers who take fry-cook jobs because a crappy paycheck beats no paycheck. Self-employed is tricky too, because is slow business unemployed? Sure each of these edge cases is just that, but there are enough to add up to a noticable amount.
- deleted 17y ago
  [deleted]
- sireat 17y ago
  You are right, it is a flawed number, it does not take into account "the discouraged(people who gave up looking for work)", "the startup(ie most of YC)", prisoners(1.5% of theworking population in US) and some other groups. However, 10.2% unemployment even by flawed definition is still significant.
Femur 17y ago
It is important to note that unemployment is a lagging indicator; we may be in recovery while unemployment worsens for some time. http://en.wikipedia.org/wiki/Lagging_indicator http://en.wikipedia.org/wiki/Lagging_indicator
- jamesbressi 17y ago
  A very good point that I was going to include in my comment on this article and left out in an effort to stay on my topic about the flaws of the calculation. To support your point, I think it is more well known after this last year that "recession indicators" are lagging and we are typically in a recession a good 3-6 months before it is declared and the reverse is true for when we get out of it. Thanks for bringing this up.
- jswinghammer 17y ago
  U-6 is now at 17.5%. If unemployment continues to climb all next year is it still lagging or just an indication that our economy is a mess? I'm voting total mess.
- fnid 17y ago
  An extended period of unemployment will be very bad for a society based on consumption. Consumer spending accounts for two-thirds of the US economy and consumers are a dying species. I see few signs that we are in recovery. What I see is boredom with gloom. People want the economy to be in recovery, so they find reasons to believe it so.
  - bh23ha 17y ago
    That's true, we may not be in a recovery but in a restructuring. Restructuring an economy is much more painful then a run of the mill recession. However if we are indeed restructuring to be less of a consumer nation and more of a manufacturing and export nation again, in the long run that's a good thing. Or to put it in other words, you can't run both trade and fiscal deficits at the same time for ever. Things would not have gone this far if the US didn't have such a huge fiscal deficit, which allowed China to depress their currency by buying US debt. If it had not been for China buying so much US debt, the dollar would have slowly fallen against the yuan over the years, and the yuan would have slowly risen. And if oil wasn't traded in US dollars, we would have invested more in insulation and alternatives much sooner. Now this is all finally happening and it is painful, but unavoidable.
infynyxx 17y ago
it's also worth noting that the rate is slowing down and as predicted by many economists, this rate (unemployment) will further increase
btilly 17y ago
Two things about these figures. The first is that you shouldn't believe any historical comparisons. Over the years the US definition of unemployment was revised multiple times, and each time it was revised it was to a methodology that gave lower numbers. Therefore you aren't comparing apples to apples when you compare current figures with, say, the recession in the early 80s. The other thing to consider is that we aren't out of the woods yet economically. There are still a lot of credit issues out there. You can see http://bentilly.blogspot.com/2009/11/is-financial-crisis-really-over.html http://bentilly.blogspot.com/2009/11/is-financial-crisis-rea... for a list of some of them. And continued jobless numbers are not about to help.
- vire 17y ago
  Great link. Thanks. Funny thing is, when just about everyone I knew was "getting their war on" and "getting their granite countertops on", it all felt ominous to me. I'm afraid that the U.S. is in for a very humbling penance.

32 points by kp212 17y ago

No one get upset over the problematic math behind the unemployment rate. Even when I took economics in university and we got on this topic, our professor said that it is a very flawed number for such a numerous amount of reasons, but until the government adopts a better way of substantiating, view it as nothing more than a number that may or may not help you gauge the economic climate. In other words, there is some benefit in understanding our situation with this surveyed number, but you should always question it and the media and government will use it how they please for their own agendas. The debate on the unemployment rate is very interesting; Google it if you have time and read up.

jeromec 17y ago
It's still a useful number as long as it's measured consistently. It may not be a verbatim reflection of worker to full employment, for example, since it doesn't count "under employed" or the people that want to work more hours, but can't. However, if we know that the 10% it represents is more than triple what we might consider normal then it can be a telling gauge.
- RyanMcGreal 17y ago
  There's still a problem: when the unemployment rate starts to fall six months or a year after it spikes, that in itself tells you nothing about whether people are exiting unemployment because they've found jobs or because they've given up looking.
  - natevc2 17y ago
    You could make the unemployment number get "better" by convincing people that they shouldn't try to find a job because the market is so bad. That is why a lot of people look at the payroll report at the same time. But the payroll report usually comes with large revisions.
  - yummyfajitas 17y ago
    Unemployment does not tell you this, but discouraged workers does. http://www.bls.gov/news.release/empsit.t13.htm http://www.bls.gov/news.release/empsit.t13.htm There are 808,000 such people (as of october), up from 484,000 in october 2008.
    - fnid 17y ago
      Interesting. If you look at those numbers, the amount of people who used to work more is also declining, meaning people aren't earning as much as they used to from more than one job.
- stumm 17y ago
  If you include discouraged workers (ie. people who aren't looking for work) the rate is actually 17.5%. http://www.bls.gov/news.release/empsit.t12.htm http://www.bls.gov/news.release/empsit.t12.htm
- btilly 17y ago
  It's still a useful number as long as it's measured consistently. Unfortunately it is not measured consistently over long periods of time.
  - dsplittgerber 17y ago
    The government in Germany some years ago messed around with the data and the data set until all appeared well and some parts of the unemployed population - apparantly mostly the long-time unemployed, who have no motivation left to ever leave the welfare benefits system to work again - were just dropped from the data set. Recognize that unemployment data is a government tool. It's one of many interesting data points for one's analysis of the economic situation, but by itself it's pretty meaningless as it's not consistently measured over time.
  - Perceval 17y ago
    Here's an excellent article detailing how the government over the past 40 years or so has been changing the measurements of our basic economic indicators: http://harpers.org/archive/2008/05/0082023 http://harpers.org/archive/2008/05/0082023
- yummyfajitas 17y ago
  It's very true that the time series Unemployment does not count involuntary part time workers. However, the time series Involuntary Part Time Workers does count people who want to work more hours but can't. The BLS tracks both these numbers. http://www.bls.gov/news.release/empsit.t05.htm http://www.bls.gov/news.release/empsit.t05.htm I think half the criticism of the unemployment number is simply because people wish one number could explain everything, but unemployment does not.
RyanMcGreal 17y ago
Judging unemployment via the unemployment rate is a bit like judging your website's popularity via Alexa. The question becomes: is lousy data better or worse than no data?
- fnid 17y ago
  It's not no data. There are lots of data points to use, it's the choice of exactly which data points to use that is in question. The same debate rages over inflation as well. The issue is who is and who isn't included in the definition of unemployed. The truth is, if you don't have a job and you need one, but you've given up your search, you're still unemployed.
  - sophacles 17y ago
    Further how do we count people who are underemployed? For instance, software developers who take fry-cook jobs because a crappy paycheck beats no paycheck. Self-employed is tricky too, because is slow business unemployed? Sure each of these edge cases is just that, but there are enough to add up to a noticable amount.
deleted 17y ago
[deleted]
sireat 17y ago
You are right, it is a flawed number, it does not take into account "the discouraged(people who gave up looking for work)", "the startup(ie most of YC)", prisoners(1.5% of theworking population in US) and some other groups. However, 10.2% unemployment even by flawed definition is still significant.

Femur 17y ago

It is important to note that unemployment is a lagging indicator; we may be in recovery while unemployment worsens for some time. http://en.wikipedia.org/wiki/Lagging_indicator http://en.wikipedia.org/wiki/Lagging_indicator

jamesbressi 17y ago
A very good point that I was going to include in my comment on this article and left out in an effort to stay on my topic about the flaws of the calculation. To support your point, I think it is more well known after this last year that "recession indicators" are lagging and we are typically in a recession a good 3-6 months before it is declared and the reverse is true for when we get out of it. Thanks for bringing this up.
jswinghammer 17y ago
U-6 is now at 17.5%. If unemployment continues to climb all next year is it still lagging or just an indication that our economy is a mess? I'm voting total mess.
fnid 17y ago
An extended period of unemployment will be very bad for a society based on consumption. Consumer spending accounts for two-thirds of the US economy and consumers are a dying species. I see few signs that we are in recovery. What I see is boredom with gloom. People want the economy to be in recovery, so they find reasons to believe it so.
- bh23ha 17y ago
  That's true, we may not be in a recovery but in a restructuring. Restructuring an economy is much more painful then a run of the mill recession. However if we are indeed restructuring to be less of a consumer nation and more of a manufacturing and export nation again, in the long run that's a good thing. Or to put it in other words, you can't run both trade and fiscal deficits at the same time for ever. Things would not have gone this far if the US didn't have such a huge fiscal deficit, which allowed China to depress their currency by buying US debt. If it had not been for China buying so much US debt, the dollar would have slowly fallen against the yuan over the years, and the yuan would have slowly risen. And if oil wasn't traded in US dollars, we would have invested more in insulation and alternatives much sooner. Now this is all finally happening and it is painful, but unavoidable.

infynyxx 17y ago

it's also worth noting that the rate is slowing down and as predicted by many economists, this rate (unemployment) will further increase

btilly 17y ago

Two things about these figures. The first is that you shouldn't believe any historical comparisons. Over the years the US definition of unemployment was revised multiple times, and each time it was revised it was to a methodology that gave lower numbers. Therefore you aren't comparing apples to apples when you compare current figures with, say, the recession in the early 80s. The other thing to consider is that we aren't out of the woods yet economically. There are still a lot of credit issues out there. You can see http://bentilly.blogspot.com/2009/11/is-financial-crisis-really-over.html http://bentilly.blogspot.com/2009/11/is-financial-crisis-rea... for a list of some of them. And continued jobless numbers are not about to help.

vire 17y ago
Great link. Thanks. Funny thing is, when just about everyone I knew was "getting their war on" and "getting their granite countertops on", it all felt ominous to me. I'm afraid that the U.S. is in for a very humbling penance.