Unemployment stats are a sad joke

[TroyPDX]

Ok, so we all know that in general unemployment statistics have been so subverted and tinkered with over the last 20-30 years that they have no basis in reality and make it impossible to compare statistics from any other era.

In addition though, I believe the underemployment realities during this economic free fall have not been getting nearly the attention from the media that is warranted, for this is a level of underemployment that is qualitatively as well as quantitatively different. I work for a construction contractor in Oregon. Almost all of the actual construction is done by independent contractors, who aren't 'employees' to begin with, so cannot be 'unemployed'. Regardless of their official status, it is sad every day to see them falling behind on their mortgages and wondering how to keep the lights and heat on. Then there are all the small business owners in this industry who are bleeding money, but aren't 'unemployed'. Then there are the numerous industry reps who call on us daily who work mostly on commission and their incomes are down to less than half of what they were making a year ago, though they are still 'employed'. Our builders are sitting on vacant lots with no banks willing to make loans, and many of them have carrying costs of vacant homes that remain unsold.

Many builders, vendors, contractors etc. that we deal with are just hanging on now, burning up reserves, hoping for a turn around in the next 6-10 months. I'm afraid that isn't going to happen, and then there will be a catastrophic new wave of unemployment.

The current 7% rate the media keeps touting just grates on my nerves. So many people are struggling and suffering and it's getting worse by the day. This is not a 7% problem...lies, damned lies, and statistics.

[don]

Re: Unemployment stats are a sad joke

The unemployment rate for the majority of people is felt on the level you so well described. Now its an emotional dread. Most people who are just trying to make a living, without an ideological ax to grind, know in their gut if times are good or bad. Would it make any difference if the Feds came clean? I really don't know if it would for them.

[bart]

Re: Unemployment stats are a sad joke

Ok, so we all know that in general unemployment statistics have been so subverted and tinkered with over the last 20-30 years that they have no basis in reality and make it impossible to compare statistics from any other era.

In addition though, I believe the underemployment realities during this economic free fall have not been getting nearly the attention from the media that is warranted, for this is a level of underemployment that is qualitatively as well as quantitatively different.

Sort of (and agreed on the lack of accuracy or spin from most media)... but I've managed to reconstruct what I think is a pretty decent long term picture of unemployment that hopefully minimizes the problem with comparing apples to apples on a long term basis. Notice how close the U-6 data is to U-3 data in 1970 - it looks from here to be a pretty decent bridge.

It's also far from perfect... but all of the data is directly from the BLS and the only thing I've done with the U6 data prior to 1994 is just interpolate it from yearly into monthly data and fill in a few specific months from the sparse BLS data.
I have punted a bit on my new U-7 reconstruction though, so feel free to discount or ignore it or even use John Williams excellent work in the area.







Unemployment rate type definitions

• U1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
• U2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
• U3 Total unemployed, as a percent of the civilian labor force (the 'official' unemployment rate)
• U4 Total unemployed plus discouraged workers, as a percent of the civilian labor force
• U5 Total unemployed, plus discouraged workers, plus all other marginally attached workers as a percent of the civilian labor force
• U6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force(the closest to real unemployment, and the one that should be used when comparing to other countries)
• U7 U6, plus a broader definition of discouraged workers. Dropped in 1994.
• Adj The "adjustments" that were done during the '90s Clinton adminstration that defined away part of a class of people called "discouraged workers" (as documented by John Williams)add at least another 1-2% to the U6 unemployment rate. The actual raw number of uncounted "discouraged workers" was around 1.3 million as of early 2007. This also used to be known as the U-7 measure of unemployment.

Source
Many More Are Jobless Than Are Unemployed (April 2008 article in the NY Times)
John Williams unemployment chart with seasonally adjusted numbers
The birth/death model, more BS from the BLS

1982 definitions of U-1 through U-7

[metalman]

Re: Unemployment stats are a sad joke

Ok, so we all know that in general unemployment statistics have been so subverted and tinkered with over the last 20-30 years that they have no basis in reality and make it impossible to compare statistics from any other era.

In addition though, I believe the underemployment realities during this economic free fall have not been getting nearly the attention from the media that is warranted, for this is a level of underemployment that is qualitatively as well as quantitatively different. I work for a construction contractor in Oregon. Almost all of the actual construction is done by independent contractors, who aren't 'employees' to begin with, so cannot be 'unemployed'. Regardless of their official status, it is sad every day to see them falling behind on their mortgages and wondering how to keep the lights and heat on. Then there are all the small business owners in this industry who are bleeding money, but aren't 'unemployed'. Then there are the numerous industry reps who call on us daily who work mostly on commission and their incomes are down to less than half of what they were making a year ago, though they are still 'employed'. Our builders are sitting on vacant lots with no banks willing to make loans, and many of them have carrying costs of vacant homes that remain unsold.

Many builders, vendors, contractors etc. that we deal with are just hanging on now, burning up reserves, hoping for a turn around in the next 6-10 months. I'm afraid that isn't going to happen, and then there will be a catastrophic new wave of unemployment.

The current 7% rate the media keeps touting just grates on my nerves. So many people are struggling and suffering and it's getting worse by the day. This is not a 7% problem...lies, damned lies, and statistics.

itulip's done some heavy lifting in this area...

Housing Bubble Correction Update: Here comes the jobs crash (Part I)

Unemployment by industry: Recession or depression? - Eric Janszen

in sum... no state or industry for refuge. or country, for that matter.

in two years most folks will be scraping by and bragging rights will be 'i still have my house'. the msm. just. don't. get. it.

[strittmatter]

Re: Unemployment stats are a sad joke

Not good..........

http://www.dallasnews.com/sharedcont...o.5df5769.html

[LargoWinch]

Re: Unemployment stats are a sad joke

Awesome UUUUUUsssss definitions!

Thanks Bart: I copied and pasted for future notes...

[TRake]

Re: Unemployment stats are a sad joke

For only but a few seconds CNBC showed a chart of what they called "marginal" unemployment. This chart was shown on or about the beginning of this year and they showed a time period back to the 74-76 recession. This marginal unemployment was supposed to factor in many variables overlooked today. This chart was already well past any recession between the 60's and it was accelerating in the upward direction parabolically or exponentially. All Gasparino had to say was that this chart really concerns him.

I am considering joining as a paying member to this site, but money is tight these days. Imagine that.

TRake

[metalman]

Re: Unemployment stats are a sad joke

For only but a few seconds CNBC showed a chart of what they called "marginal" unemployment. This chart was shown on or about the beginning of this year and they showed a time period back to the 74-76 recession. This marginal unemployment was supposed to factor in many variables overlooked today. This chart was already well past any recession between the 60's and it was accelerating in the upward direction parabolically or exponentially. All Gasparino had to say was that this chart really concerns him.

I am considering joining as a paying member to this site, but money is tight these days. Imagine that.

TRake

there is a ton of free stuff on this subject here. google 'itulip unemployment'... recommend a glass of wine or big crack rock first.

[TRake]

Re: Unemployment stats are a sad joke

Thanks metalman! I am still learning the navigation of this site. I am a mathematician by trade and I do know how to program and operate a PC, but blogging was never a hobby. I enjoy numbers and I can fairly easily see that something is not right in the markets today. It takes more than just one man to instantaneously understand what many men are doing. Mathematics is all about predicting the future based on true numbers, true assumptions and certain variables. The psychological aspect of our markets is where big money can be made, and it can be done legally.........

Thanks for the help!
TRake