Going past unemployment to homelessness; I've read comments on this site many times about using abandoned buildings for the homeless. I hope it catches on.
Andrew Foland, it is really hard to tell. The DOL is trying to separate out the extended benefits and not report them as part of this weekly report - that is different than before when they used to just include them. I don't know how effective this new approach is.
I think things will get much, much worse. I think we'll eventually see truly depressionary unemployment of 13% or perhaps even more. Naive extrapolations of the A2/P2 spread from now and the 74-75 recession support this - three times the spread should produce three times the increase in unemployment, which was 4% in 74-75, so we should go up 12%, to a rate of 16-17%. The A2-P2 spread is probably somewhat exaggerated by Fed intervention lowering rates for AA borrowers more than A2-P2 borrowers but even so I think 13% is very reasonable.
Friend who was wasn't paid from May was hoping things would get better. This person is now thinking of throwing in the towel and getting unemployment payments instead.
I think we can hit 12-16% very fast. very very fast.
But 10% will be the capitulation high-water mark that indicates this river is actually going to exceed its banks. Of course, I will also bet a fair amount of economist will tell us that "historically" 10% is high, therefore the likelihood of it going higher is unlikely...
CR - a suggestion. These are more graphs that could use per capita type line overlaid (probably initial claims per 1000 of workforce) with a scale on the left side. That way you wouldn't need to add a disclaimer about population growth in the text.
blackhat - absolutely agree on predictions being below 10%. We haven't seen unemployment worse than that for 70 years and people no longer think it's possible. They are in for a surprise. But a lot of that has hinged on aggressive government intervention and, as I've calculated, I think the losses are too large for even the government to fill up. Basically the Fed has committed the entirety of its balance sheet to covering bad debt. But losses are continuing, and for the Fed to loan more it has to borrow more so - we're still short.
I think the appropriate modern analogues are the 3rd world currency crises when the problem exceed the government's ability to handle them (e.g. Argentina, Indonesia) and you routinely have unemployment rates in the teens in those circumstances.
The natural tendency is for a very rapid rise, as you predict. The government is going to try to slow it down, and it may succeed, due to psychological effect (if people believe the government can do it, that will slow things down). We'll see.
I was rather enjoying not hearing them retailed for the nth time, but perhaps you're right. Confirmation bias in play? ;0)
burnside
At this point it would be impolite to recite the litany. The converted are already in a state of grace and the apostate are beyond our influence.
Anecdote. I was in the FedEX office yesterday. Normally a week before thanksgiving there'd be a line out the door and packages to the gunnels as people rushed to assure international deliveries. In the time I was there two people came in looking for jobs. I was the only customer. The job seekers were told no seasonal hiring this year. At FedEX?
I think we can hit 12-16% very fast. very very fast.
But 10% will be the capitulation high-water mark that indicates this river is actually going to exceed its banks. Of course, I will also bet a fair amount of economist will tell us that "historically" 10% is high, therefore the likelihood of it going higher is unlikely...
blackhat | Homepage | 11.20.08 - 9:33 am | #
Counting all of the men in Federal Prisons (3 million), we are likely over 10% already. Then there are the millions of "retired" autoworkers, police officers, teachers, fireman, public works workers, etc. who are somewhere between 50 and 60 and could easily work some more. The problem is that their retirements are proving to be a strain on all of us, raising the costs of everything that we buy and our taxes.
This Bill has been sitting in commitee since spring - it may not be perfect but what is...
I have not seen anything else that requires the two parties involved in a bad mortgage - the bank and the borrower - to be the ones who work this crap out, instead of dumping it on all of us taxpayers.
I think unemployment charts need to show the early '80s numbers for comparison. The recent recessions have been too small to compare to what is going on now.
me
Is there an apples-to-oranges thing, in that benefits were extended recently, IIRC? So that continuing claims go on longer and therefore pile up?
http://www.wmur.com/family/18021255/detail.html
"Concord Seeks Vacant School to House Homeless"
Going past unemployment to homelessness; I've read comments on this site many times about using abandoned buildings for the homeless. I hope it catches on.
third?
Interesting since the numbers have collapsed so badly that there isn't much discussion about how cooked the numbers are.
Once again, November 2008,2009,2010,2011, and stabilizing in 2012-2015.
This goes above 10% faster than anyone thinks. This accelerates from bad to worse very quickly.
Andrew Foland, it is really hard to tell. The DOL is trying to separate out the extended benefits and not report them as part of this weekly report - that is different than before when they used to just include them. I don't know how effective this new approach is.
Best Wishes.
When the U-3 approaches the current U-6, I'm thinking those gated communities will need higher fences.......
I think things will get much, much worse. I think we'll eventually see truly depressionary unemployment of 13% or perhaps even more. Naive extrapolations of the A2/P2 spread from now and the 74-75 recession support this - three times the spread should produce three times the increase in unemployment, which was 4% in 74-75, so we should go up 12%, to a rate of 16-17%. The A2-P2 spread is probably somewhat exaggerated by Fed intervention lowering rates for AA borrowers more than A2-P2 borrowers but even so I think 13% is very reasonable.
Friend who was wasn't paid from May was hoping things would get better. This person is now thinking of throwing in the towel and getting unemployment payments instead.
I guess there are others in similar circumstance.
Interesting since the numbers have collapsed so badly that there isn't much discussion about how cooked the numbers are.
I was rather enjoying not hearing them retailed for the nth time, but perhaps you're right. Confirmation bias in play? ;0)
Fair Economist - I really respect your opinion and all I can say is WOW!
Fair Economist,
I think we can hit 12-16% very fast. very very fast.
But 10% will be the capitulation high-water mark that indicates this river is actually going to exceed its banks. Of course, I will also bet a fair amount of economist will tell us that "historically" 10% is high, therefore the likelihood of it going higher is unlikely...
10% is high, therefore the likelihood of it going higher is unlikely...
I forgot the part where I then vomit in my mouth...but enough said....
In Idaho, the state just raised U/I employer contributions by 70% and lowered the weekly benefit for claimaints. Go figure.
Interesting since the numbers have collapsed so badly that there isn't much discussion about how cooked the numbers are
Interesting that since the election the numbers have collapsed so badly. I'm sure it is coincidence.
Coincidence. Merely that and nothing more. Quoth the Reagan, "Less is more".
I understand there are massive new job openings for people interested in counting the numbers of the newly unemployed....
At least these newly re-employed recently unemployed employees will have busy work...
All your charts are getting worse than the last recession's. Maybe it's time to use depression bars!
CR - a suggestion. These are more graphs that could use per capita type line overlaid (probably initial claims per 1000 of workforce) with a scale on the left side. That way you wouldn't need to add a disclaimer about population growth in the text.
blackhat - absolutely agree on predictions being below 10%. We haven't seen unemployment worse than that for 70 years and people no longer think it's possible. They are in for a surprise. But a lot of that has hinged on aggressive government intervention and, as I've calculated, I think the losses are too large for even the government to fill up. Basically the Fed has committed the entirety of its balance sheet to covering bad debt. But losses are continuing, and for the Fed to loan more it has to borrow more so - we're still short.
I think the appropriate modern analogues are the 3rd world currency crises when the problem exceed the government's ability to handle them (e.g. Argentina, Indonesia) and you routinely have unemployment rates in the teens in those circumstances.
The natural tendency is for a very rapid rise, as you predict. The government is going to try to slow it down, and it may succeed, due to psychological effect (if people believe the government can do it, that will slow things down). We'll see.
I was rather enjoying not hearing them retailed for the nth time, but perhaps you're right. Confirmation bias in play? ;0)
burnside
At this point it would be impolite to recite the litany. The converted are already in a state of grace and the apostate are beyond our influence.
Anecdote. I was in the FedEX office yesterday. Normally a week before thanksgiving there'd be a line out the door and packages to the gunnels as people rushed to assure international deliveries. In the time I was there two people came in looking for jobs. I was the only customer. The job seekers were told no seasonal hiring this year. At FedEX?
I think the per capita idea by PeakVT is a good one. We can then compare this disaster with others from the past.
And right before Christmas...ouch!
Oops - scale on the right side.
blackhat writes:
Fair Economist,
I think we can hit 12-16% very fast. very very fast.
But 10% will be the capitulation high-water mark that indicates this river is actually going to exceed its banks. Of course, I will also bet a fair amount of economist will tell us that "historically" 10% is high, therefore the likelihood of it going higher is unlikely...
blackhat | Homepage | 11.20.08 - 9:33 am | #
Counting all of the men in Federal Prisons (3 million), we are likely over 10% already. Then there are the millions of "retired" autoworkers, police officers, teachers, fireman, public works workers, etc. who are somewhere between 50 and 60 and could easily work some more. The problem is that their retirements are proving to be a strain on all of us, raising the costs of everything that we buy and our taxes.
What I want to know is who protects the taxpayer from paying retirement benefits when the pension funds go to zero?
This is like early 1980's numbers - this is bad...
We really need to do something to keep all of these people from being thrown out onto the street due to foreclosures:
A Foreclosure Solution so Simple it Would Work « Your Mortgage or Your Life…
This Bill has been sitting in commitee since spring - it may not be perfect but what is...
I have not seen anything else that requires the two parties involved in a bad mortgage - the bank and the borrower - to be the ones who work this crap out, instead of dumping it on all of us taxpayers.
Too simple to work, probably.
I think unemployment charts need to show the early '80s numbers for comparison. The recent recessions have been too small to compare to what is going on now.
Hey everybody, supposed to be lots of orange picking jobs in California. Pass it on.
In pretty short order Obama is going to wish his GOTV operation hadn't been so dang effective.
By carefully seeking unemployment for years, I have craftily made my self immune to the state.
These numbers fail to capture the increase in employment by hookers.
Collecting unemployment is more a sure thing than getting another job.