CR thanks for putting this together... I think it provides a better understanding....

I am watching EMRATIO more closely than unemployment number now, since hundreds of thousands of people will be falling off the rolls by the end of the year.

Joke of the day:

My Times UP?
A 54 year old woman had a heart attack and was taken to the Hospital, while on the operating table she had a near death experience.

Seeing God she asked 'Is my time up?' God said, 'No, you have another 43 years, 2 months and 8 days to live.

Upon recovery, the woman decided to stay in the hospital and have a face-lift, liposuction, breast implants and a tummy tuck. She even had someone come in to change her hair color and brighten her teeth! Since she had so much more time to live, she figured she might as well make the most of it.

After her last operation, she was released from the hospital. While crossing the street on her way home, she was killed by an ambulance.

Arriving in front of God, she demanded, 'I thought you said I had another 43 years?
Why didn't you pull me from out of the path of the ambulance?

God replied: 'I didn't recognize you.

Sales people are the bubble creators.

Look at realtors and stock pumpers...

Note on the Cal IOU

The IOUs probably won't be cashed by the state for 90 days - and then only if the treasury has the money to cover them."

90 days....and this is going to end how you say?

"The number of long-term unemployed (those jobless for 27 weeks or
more) increased by 433,000 over the month to 4.4 million. In June, 3
in 10 unemployed persons were jobless for 27 weeks or more. (See
table A-9.)"

From the BLS report.

Once again, proving my point that the continuing claims number is not a good indicators of labor market health, as all it measures is the number of people collecting the 26 week state benefits.

We have long term structural issues with this economy, 26 weeks of benefits will not be enough for most people.

Sales people are the bubble creators.

You're changing the topic from the relative effectiveness of sales vis-a-vis engineering. There are companies that have succeeded largely on the strength of their engineering (often on the basis of a single inspired design, like the VW Beetle) - but much more often the match is between one company with good engineers and great salesmen, and another with great engineers and good salesmen. And in those cases sales wins.

More gems:

"Persons Not in the Labor Force (Household Survey Data)

About 2.2 million persons (not seasonally adjusted) were marginally
attached to the labor force in June, 618,000 more than a year earlier.
These individuals wanted and were available for work and had looked
for a job sometime in the past 12 months. They were not counted as
unemployed because they had not searched for work in the 4 weeks
preceding the survey. "

And, someone here called this correctly, after a "false positive" read on an earlier labor report:

"Employment in federal
government fell by 49,000 in June, largely due to the layoff of work-
ers temporarily hired to prepare for Census 2010."

shill - spectacular!!

it wouldn't be surprising if the future values plunge below 100, for some extended period.

I think the "project" line is wildly optimistic.

The Government did get harm by facilitating the exodus of much of our manufacturing base. While I support helping mexico and other poor countries raise their standard of living, I do not see how US can create/maintain all the jobs needed to support the population without bringing back manufacturing/making things in some fashion. As I said yesterday, UE hits 10+ %, watch out BHO and Arnold!

BURN

Every 1% decline wrecks havoc on the MBSs and CDO's.

NumbersUSA | For Lower Immigration Levels - For Lower Immigration Levels

has a great interactive graph showing where population growth has occured since 1980

In VA loudoun county's population increased 400%!.

California as a whole had a huge increase in population.

This country has been growing to fast in population.

@Rob Dawg - I thought I read that you believed the recession would be called over in 2H/09 for political reasons, even if you didn't actually believe the conditions would warrant it.

US taxpayers to provide additional $1.7B to unwind GM. WTF? $50B wasn't enough to "unwind"?

CR linked to this, but sometimes those embedded links are hard to see.

Everyone in America should read this report, it isn't that long, and does not incorporate a lot of fancy wording. It is pretty straight, in-your-face brutal. Read this, and tell me that all these "second derivative improvements" mean anything.

Employment Situation Summary 

"The number of unemployed persons (14.7 million) and the unemployment
rate (9.5 percent) were little changed in June. Since the start of the
recession in December 2007, the number of unemployed persons has increas-
ed by 7.2 million, and the unemployment rate has risen by 4.6 percentage
points. (See table A-1.)"

"....and still unnumbered and unreported are the increase/decrease of the 12-million 1099 individuals. Many companies large and small have utilized 1099-workers as a way of eliminating or decreasing employment costs such as unemployment insurance, withholding and social security deductions, workers comps expenses, etc."

I know of an increasing number of people working under that status.

I put together a quick plot showing the Birth/Death model impacts on reported job loss numbers if anyone would like to see that:
energyecon

Summary: Over the last three months, the B/D adjustment has reduced the cumulative reported job loss by ~33% -- what would otherwise have been a -1,939K job loss became a -1,308K job loss -- due to the 3 month contribution of 631K jobs from B/D ajustments.

"I know of an increasing number of people working under that status."

.....80%+ of my entire work history was as a "1099" worker..........and I'm an old guy........ I'd bet there's more of us sitting around than the reported unemployed.

Hey can anyone in the commentariat point me at three downloadable time series - continuing unemployment claims, extended unemployment claims and exhausted unemployment claims - a stack bar time series of that might be interesting...

If the employment/population ratio drops another percent it'll be where it was in '74 and '70 -- when there were substantially fewer two-earner households, although the number was rising.

In other words, employment/population ratio will be as low as it was at a time when fewer adults had to work.

My take on the numbers:

Another Ugly Jobs Report

another further analysis will be up shortly

CR,

Please could you add the recession bars to the graphs of initial and continuing unemployment claims?

Thanks.

Taleb is still calling it:

'We're in the Middle of a Crash': Black Swan
'We're in the Middle of a Crash': Black Swan - CNBC 

On a related note: migration south across the border with Mexico now exceeds migration north.

Officially, I work 40 hours a week. Unofficially, I work probably 50-60 hours a week. If I don't work those irregular hours, I'm perceived to not be doing my job. Where do I fit in, in these statistics?

Bravo, JD

mal: you're right where you're supposed to be, bought and paid for as part of the plantation.

Once the extended benefits expire, I expect to see a surge in homeless - very sad. - CR

We have 20 million vacant housing units and homelessness is expected to soar. Workers can build the houses, but not afford them . What a system.

What good is production/output if all the benefits go to so few?

We don't have a production problem. We have a distribution problem.

Well they are slow getting it up over at Zacks.com so here is my second post on the UE report:

One of the most important aspects of this recession is the length of time people are out of work once they get their pink slips. The average length of time someone who is out of a job has been looking is now up to 24.5 weeks, that is a dramatic increase from the 22.5 weeks last month and 17.6 weeks a year ago. This simply blows away the previous record (other than last month) of 21.2 weeks which was touched in July of 1983. Of course there is a skewed distribution of unemployed duration since there is no limit on the upside, but you can’t be unemployed for less than 0 weeks. The median length of unemployment has also been rising though, now up to 17.9 weeks from 14.9 weeks in May and 10.1 weeks a year ago. It is also at a record with the worst levels prior to this recession being just 12.3 weeks hit in May of 1983.

While the absolute number of people who are out of work is a record of 14.7 million, to some extent that should be expected, given the growth of the workforce since the last really bad downturn in the 1980’s. The previous peak was 12.0 million at the tail end of that recession. However while the current level of overall unemployed is 22.5% above its previous peak, the number of long term unemployed is truly at unprecedented levels. The number of people out of work for 27 weeks or longer is now 4.281 million, 51.8% higher than the previous peak of 2.885 million (6/83). It is also 11.0% higher than it was just a month ago, and 170% higher than it was just a year ago. The ratio of long term (27 weeks or longer) unemployed to short term unemployed (less than 5 weeks) is now at 1.37. Prior to April the ratio had never exceeded 1.0. The history of this ratio is shown below. While the graph does not include recession bars, I would note that in the past this ratio tended to peak after the recession formally ended, this it seems likely that it will continue to increase for a while longer.

Being out of work for more than six months is a very different experience than being out of work for two or three weeks. In many states it means that your unemployment benefits have run out (although the stimulus bill has extended benefits for most). The extended benefits from the stimulus bill have been a vital lifeline to millions of people. Long term unemployment will do serious permanent damage to a person’s financial situation. To have this happening in conjunction with weak asset prices can be devastating. In prior recessions, people had the ability to tap the equity in their homes as a potential liquidity lifeline. Now with so many homeowners underwater, that option is no longer available. At one point they might have been able to have drawn on their savings, however for years we as a country went with a savings rate that was close to zero, as people used asset appreciation as a substitute. Now that the asset appreciation has turned to asset depreciation, there is not much there to fall back on.

For a while, they will fall back on plastic, but eventually the cards max out. At that point the only real option becomes bankruptcy. The big credit card issuing banks like American Express (AXP), J.P. Morgan (JPM) and Capitol One (COF) realize this and this is why they are aggressively lowering the limits on many card holders. From their perspective, it is better to get stiffed on $5,000 than on $15,000. If someone is faced with the double problem of being underwater on their house and being out of work for an extended time, then walking away from the house, or simply not paying the mortgage until the sheriff knocks on the door becomes an increasingly attractive option. The result is more distressed homes on the market, and more pressure on housing prices, which in turn puts more homeowners underwater. Not an attractive prospect for any company exposed to the mortgage area, including the big banks and Fannie Mae (FNM) and Freddie Mac (FRE). That means bad news to the taxpayers as well, since we are the proud owners of majority stakes in them.

CR: I will e-mail you the graph referenced, if you want to put it up feel free.

I just don't get the fascination with Taleb's book "The Black Swan". The book misses the point of this financial calamity entirely. This mess was not caused by statistical flukes, it was caused by fraud. Layers and layers of fraud.

If a Black Swan event did indeed occur, how is it that so many bloggers and non-mainstream economists identified the coming bust years in advance?

Statistical outliers? Hardly. Statistical liars is more apt.

Taleb's first book "Fooled by Randomness" was better. Black Swan is a re-hash issued to capitalize on the bust.

Apart from reviving manufacturing, the only other solution I can think of is to go back to family farming; this will empty out the cities and we will have to demolish the factory farm system. Food prices will rise some but that is ok, 40% of food grown is thrown away anyway. Honest living from honest days work.

We are asleep at the wheel! Some kind of public humiliation of Goldman Sachs folks can trigger a national awakening day!

Mal,

That was similar to my work life over 30 years as a university teacher (expected to actually teach as opposed to "do research") only in my case it was that I could not do my job with any integrity without that number of hours; it was not a perception problem of the administrators or my department heads. I know there are slackers out there, but most of the folks I know face similar per week demands.

If the employment/population ratio drops another percent it'll be where it was in '74 and '70 -- when there were substantially fewer two-earner households, although the number was rising.

In other words, employment / population ratio will be as low as it was at a time when fewer adults had to work.

If you factor out those employed by the government (and I always do), the ratio is already back to the levels of '74.

Currently, just over 76% of our civilian labor force is employed in the private sector - barely over three-fourths - and that's using the most generous definition of "private sector" possible (which includes the self-employed, those working in private households, etc.). In 1974, that ratio was nearly 79%.

If you use the "non-farm payrolls" definition of private sector employment, I'd wager that today's numbers are even grimmer.

It seems to me that higher education, then, is also becoming too complex , if teachers have to work that many hours - pouring ALL their energy into a workweek? How do you recharge? How does that affect quality of so-called education?

That's what happens in depressions.

Rob Dawg,

Yes, that is what happens. Especially when TPTB perpetuate the financial fraud. Houses remain unaffordable, bad debts gum up the system, and the majority suffer mightily. All due to the mischief of bankers. Especially fed bankers.

It doesn't have to be so hard. Venal bankers and politicians ensure it works that way though. Sad.

BTW, I left you a comment on the last thread regarding resource depletion. Not sure if you saw it. The Nauruianites are indeed an interesting case to ponder.

Presidential Approval Index has been deteriorating since BHO's first day in office. Now more 'mericans Strongly Disapprove than Stronly approve. Crossed the line today, same day the lame duck session starts. Good riddance.

The Hope I have now is this squashes any chance his programs get through congress.

Daily Presidential Tracking Poll - Rasmussen Reports™

Taleb's first book "Fooled by Randomness" was better. Black Swan is a re-hash issued to capitalize on the bust.

I wouldn't go that far; I'd call it the inevitable result of taking a concept that (properly) occupied a page or two in his first book and trying to stretch another entire book out of it.

Taleb expounds upon the same general concept in a much tighter format in this essay - but, then, essays don't qualify for the NYT bestseller lists.

it is much easier to blame our problems on "fraud" rather than stupidity. It was the same with the S&L crisis- while there was some fraud most of the problems were based on stupidity. The same is true this time. For every fraudulent player there were 10 homeowners all to ready to believe that prices go up forever (10%pa) and all those gains could be spent .

I recall speaking with one the most respected Wall Street mortgage analysts several years ago regarding reverse mortgages. At the time she felt that the 5% p.a. appreciation factored into the mortgages was too conservative and therefore the longevity risk was not an issue since even if people lived longer than expected the homes would be worth more than forecasted.

but the fraud (while certainly present) was based on the mistaken notion that "housing prices don't fall."

Mr. Sparkle,

I don't see it that way. That "notion" was a canard used to silence critics and perpetuate the fraud/money making. Look at all the blogs that sprung up to point out the fraud and make the case that the housing bubble would pop.

The book "Sell Now" by Talbott had to have a second updated issue because the bubble went on so long. Shiller's "Irrational Exuberance" had a second issue on housing too. The fed (Bernanke included) saw what was happening but decided to use Greenspans idiotic policy of letting bubble run their course. That policy is a blank check for wall street - not a coincidence.

I don't see any of this as an outlier event. Out right liars is more apt. Willful ignorance too.

I think the best example of the lack of competency of the Obama administration is how quickly they have come to own the economic mess!"

Jesse says:"We are on the record in the opinion that the Obama economic team is ineffective, backward-thinking, compromised, and possibly corrupt. They are serving the corporate banks and not the people. They should be replaced starting with Larry Summers who is a Greenspan and Rubin crony and the core of failure on the team. Tim Geithner should follow to find better employment for his talents, possibly as a salesman of men's suits."

"It seems to me that higher education, then, is also becoming too complex , if teachers have to work that many hours - pouring ALL their energy into a workweek? How do you recharge? How does that affect quality of so-called education?."

HIGHER education? In California, any elementary school teacher worth his/her salt puts in 50 hours a week between prep, grading, and "volunteer" gigs running this or that program or special event that the school no longer has the aides to run.

As for the "three months off" (2.5 in California), most of those who don't have a high-paid mate or their own money (or didn't buy a house 20 years ago) work summer school to get pay, take additional-pay gigs with after-school programs (another 10 hours a week on top of everything else), and so on.

Why is it that way? As resources decrease, more and more societal duties are dumped on the schools at all levels. Sorting out family problems, making sure the kiddies have been fed, addressing medical problems that the parents neglect, etc., etc., etc.

At even the public university level, universities are having to put on special remedial classes for the kids who somehow got through school, got decent scores on their SATs, were accepted -- and can't write on the college level, or, in the sciences or engineering, perform the math they were supposedly ready to perform. And then there are the kids with behavioral or mental problems -- AT the college level.

I'm of the opinion that whenever society has duties it doesn't know how to handle, it throws them at the schools. Back in WWII, Congress decided that schools and schoolteachers would run and administer the ration stamp program -- at no pay. Just -- do it. That spirit lives on.

For those exploring the impact of 1099 workers, the IRS "Statistics of Income Division" has a lot of data/reports over the last decade or so; available on the web. Most recent data may be from 2006 or 07.

Reagan = POTUS

Bush I = POTUS

Clinton = POTUS

Bush II = POTUS

Obama = POTUS

When is everyone going to catch on? It's all the same guy. He just keeps regenerating himself, like Doctor Who.

Bob Dobbs,

I think you are correct about the schools.

Maybe someone has an answer... How does the government calculate the folks like me who were an independent contractor? I have not had an income with no social safety net for the last 7 months. How many folks have no income but are not counted.. Do these folks go on welfare? Is this counted in the numbers?

Many have called President Obama’s stimulus plan a return to Keynesian policy. Some of us who like reading Keynes professionally or for leisure have already been scratching our heads. I have wondered in particular whether the plan isn’t set up to work in a manner completely backwards from what Keynes himself had in mind when he advocated economic stabilization by government.

There are two things to remember about Keynes’s fiscal policy proposals: 1) government spending was always linked to the goal of full employment (the absence of both cyclical and structural unemployment) and 2) to achieve macro-stability and full employment, the government had to employ the unemployed directly into public works.

Read more here:
Economic Perspectives from Kansas City: A Message to President Obama: Stop Priming the Pump, Hire the Unemployed