Weekly Unemployment Claims: Decline to 514 Thousand

by CalculatedRisk on 10/15/2009 08:30:00 AM

The DOL reports weekly unemployment insurance claims decreased to 514,000:

In the week ending Oct. 10, the advance figure for seasonally adjusted initial claims was 514,000, a decrease of 10,000 from the previous week's revised figure of 524,000. The 4-week moving average was 531,500, a decrease of 9,000 from the previous week's revised average of 540,500.
...
The advance number for seasonally adjusted insured unemployment during the week ending Oct. 3 was 5,992,000, a decrease of 75,000 from the preceding week's revised level of 6,067,000.

Weekly Unemployment Claims Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since 1971.

The four-week average of weekly unemployment claims decreased this week by 9,000 to 531,500, and is now 127,250 below the peak in April.

Initial weekly claims have peaked for this cycle. The key question is: Will claims continue to decline sharply, like following the recessions in the '70s and '80s, or will claims plateau for some time at an elevated level, as happened during the jobless recoveries in the early '90s and '00s?

The level is still high - indicating continuing job losses - and the four-week average of initial weekly claims will probably have to fall below 400,000 before total employment stops falling.
Posted by CalculatedRisk on 10/15/2009 08:30:00 AM

FOMC Minutes: "Considerable Uncertainty" about Economic Growth when Fiscal Stimulus Wanes
Oct 14, 2009
There are several key points here: The pace of economic growth in 2009 and 2010 "was unlikely to reduce the unemployment rate appreciably". There are different views on future asset purchases,...
Continue >>

http://www.calculatedriskblog.com/2009/10/...ncertainty.html

There Are Six Unemployed For Every Job Opening
Vincent Fernando|Oct. 15, 2009, 12:43 PM | 106 |comment

Bargaining power clearly rests with employers. Maybe it's a good time to start your own business.
Read »

http://www.businessinsider.com/there-are-s...mployed-2009-10

30,383: First tally on stimulus jobs
First reports show companies receiving stimulus contracts directly from the federal government created more than 30,000 jobs. They have been awarded $16 billion.

http://money.cnn.com/2009/10/15/news/econo...rce=yahoo_quote

The jobs deficit:

The Job Market, in Charts, II
Catherine Rampell, Economix, October 15, 2009
More illustrations of labor market conditions, for small-business employees, mothers, health care workers and other groups.
http://economix.blogs.nytimes.com/2009/10/...t-in-charts-ii/


Don't Cut The Payroll Tax
Bruce Bartlett, Forbes, October 16, 2009
It isn't going to create jobs.
http://www.forbes.com/2009/10/15/payroll-t...ed=rss_opinions

Jobless flock to sign up for the military
The anemic job market, an increase in sign-on bonuses and new attitudes towards military service are proving to be a winning combination for recruiting.

http://money.cnn.com/2009/10/16/news/econo...sion=2009101612

Higher jobless rates could be new normal
The Associated Press
WASHINGTON — Even with an economic revival, many US jobs lost during the recession may be gone forever and a weak employment market could linger for years. ...
http://www.google.com/hostednews/ap/articl...esmUkwD9BEAN383

CBS News
Young Job Seekers Hit Hard by Economy
CBS News
A bunch of "dumber than a bag of hammers" economist - the same one who, BTW didn't see the biggest financial disaster since the Great Depression coming our ...

http://www.cbsnews.com/stories/2009/10/17/...lUpperPromoArea

You are subscribed to Unemployment Insurance Weekly Claims Report for the U.S. Department of Labor.
This information has recently been updated.

In the week ending Oct. 17, the advance figure for seasonally adjusted initial claims was 531,000, an increase of 11,000
from the previous week's revised figure of 520,000. The 4-week moving average was 532,250, a decrease of 750 from
the previous week's revised average of 533,000.

(Isn't it interesting that they show the moving average as lower in the prior report - things must be improving -
then revise it up so this weeks moving average is better than the last - things must be improving. Can you say SPIN?)

"The Growing Case for a Jobless Recovery"
Mark Thoma, Economist's View, October 22, 2009
Additional evidence that the odds of a jobless recovery are increasing.
http://economistsview.typepad.com/economis...s-recovery.html

A Clarion Call For Jobs
Newt Gingrich and Dan Varroney, Forbes, October 21, 2009
Five tax changes that would bring work to America.
http://www.forbes.com/2009/10/21/unemploym...ed=rss_opinions

US new jobless claims up again

http://www.alternet.org/rss/breaking_news/...laims_up_again/

The seasonally adjusted number of jobless claims in the week to October 17 rose 2.1 percent or 11,000 to 531,000 from the previous week's revised figure of 520,000, the Labor Department said.

It was higher than the 515,000 forecast by most economists.

The four-week moving average, which smooths out week-to-week volatility, however fell slightly to 532,250 -- a drop of 750 from the previous week's revised average of 533,000.

Weekly Unemployment Claims Increase

by CalculatedRisk on 10/22/2009 08:30:00 AM

The DOL reports weekly unemployment insurance claims increased to 531,000: http://www.workforcesecurity.doleta.gov/pr...2009/102209.asp

In the week ending Oct. 17, the advance figure for seasonally adjusted initial claims was 531,000, an increase of 11,000 from the previous week's revised figure of 520,000. The 4-week moving average was 532,250, a decrease of 750 from the previous week's revised average of 533,000.
...
The advance number for seasonally adjusted insured unemployment during the week ending Oct. 10 was 5,923,000, a decrease of 98,000 from the preceding week's revised level of 6,021,000.

Weekly Unemployment Claims Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since 1971.

The four-week average of weekly unemployment claims decreased this week by 750 to 532,250, and is now 126,500 below the peak in April.

Initial weekly claims have peaked for this cycle. The key question is: Will claims continue to decline sharply, like following the recessions in the '70s and '80s, or will claims plateau for some time at an elevated level, as happened during the jobless recoveries in the early '90s and '00s?

The level is still very high suggesting continuing job losses ...
http://www.calculatedriskblog.com/

7,000 unemployed Americans lose their lifeline every day

http://finance.yahoo.com/news/7000-unemplo...ml?x=0&.v=3

Scary Labor Market Chart of the Day
from SeekingAlpha.com: Home Page by Tim Iacono

http://seekingalpha.com/article/168200-sca...day?source=feed

Via this item at David Altig's MacroBlog comes one of the scarier labor market charts to have crossed my computer screen in recent months. Current record highs for "permanent" job loss are right up there with other similar long-term unemployment indicators bringing into question just what kind of economic recovery might be possible from here.

Massive Unemployment: Mass Layoffs Continue to Mount
from SeekingAlpha.com: Home Page by Sold At The Top
Sold At The Top submits:

Today, the Bureau of Labor Statistics (BLS) released their latest installment of the Mass Layoff Report showing continued weakness in nation’s job market with 2561 mass layoff events resulting in 248,006 initial unemployment claimants on a seasonally adjusted basis.

On a seasonally unadjusted basis, the mass layoff events totaled 1371 with 123,177 initial claimants.

Complete Story »

http://seekingalpha.com/article/168225-mas...unt?source=feed

Jobless claims stuck near 530,000, point to structurally high unemployment

For the latest week’s data for jobless claims, all you need to know is that the 4-week average barely budged and remains just above the 530,000 mark, consistent with a loss of 200,000 jobs. Clearly employment continues to lag at this point in the business cycle.

The Good

* Unadjusted initial claims. Actual initial claims came in at 460,449, putting them back below 500,000 after last week’s 509,562 broke a string of ten weeks below 500K.
* Unadjusted initial claims. This number is now at 4.89 million, the lowest since last December.
* Adjusted initial claims. The 4-week moving average SA initial claims is still falling. Now at just over 532K, it is at the lowest since Jan 17th.
* Adjusted continuing claims. The same goes for continuing claims, where the 4-week average SA number fell to 6.03 million, the lowest since April 18th.
* Change in continuing claims. 6-month and year-on-year comparisons for both NSA and SA continuing claims have been falling since May. The six-month comparisons are poised to go negative soon.

The Bad

* Change in unadjusted initial claims. The year-on-year number is up for the second week in a row, after falling every week but two since May.
* Change in adjusted initial claims. Here again, the year-on-year comparisons are going the wrong way. They are up very modestly (53,250 vs. 52,500) after falling consistently since March.

Basically, the numbers are coming down but not fast enough. The 2nd derivative i.e. the change in claims is going the wrong way – and this is in comparison to a period when claims were leaping up post-Lehman. I see this data point as an ominous sign.

That said, at the same time in the last recession (28 weeks after the average initial claims had peaked) in May of 2002, jobless claims had risen in March and April and were in the process of flatlining at around 400- 425,000. This lasted until September 2003, two years after jobless claims had peaked.

Is this what we should expect this go round? Yes. And that means the economy will have structurally high unemployment levels, putting it at risk of a recessionary lapse.
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The US Government needs to double its present investments in TRANSITIONAL EMPLOYMENT programs...a particular intervention that would be helpfull is to support more OUTPLACEMENT COUNSELING--even to the point of assiting individuals and families relocate to less crowded areas where future job opportunities can be developed...

Families already ARE relocating.

From their foreclosed house to their parents' house.

Yes, this is a frequently used option in transitional employment...

Lynn Tilton: Ending Joblessness in America
from The Huffington Post by Lynn Tilton

Although considered a woman of Wall Street, I have long seen the world from a perspective quite distinct. With over 73 companies, all of which we purchased on the precipice of destruction, and over 100,000 employees, I have a view and vision of this country that cannot be seen from a trader's window. I fear that America will soon be a country characterized by a populace of the permanently unemployed. Every day, the disconnect between Wall Street, Washington and Main Street deepens. While the stock market continues to rise towards alternate realities and Washington remains comfortably insulated with robust government spending, Main Street Americans are suffering under the weight of job losses, home foreclosures and hopelessness. Rising unemployment numbers and the duration and permanence of that joblessness are ignored as irrelevant. And, moreover, the numbers being released by Washington do not represent fairly the depth and breadth of America's jobless reality. In truth, today, one out of every 5 Americans is unemployed.

In September, the Bureau of Labor Statistics (BLS) reported that, since the start of the recession, unemployed persons in America had increased by 7.6 million to 15.1 million, and that the unemployment rate had doubled to 9.8%. But if we turn to the household survey that seeks to determine whether or not people are working by asking individuals their job status, rather than querying the companies that employ them, the September job loss figure is not 263,000 but instead closer to 785,000. Adding insult to injury, household net worth has declined by 14 trillion dollars since the onset of the recession and household financial distress is further exacerbated by diminishing employment. And the cycle of destruction continues. Underemployment, U-6, which includes both part-time workers who lust for full time employment and discouraged workers, "the marginally unattached," reached staggering new heights at 17%. Alan Abelson quantified well the situation in an October 5, Barrons column: if we add 9.2 million of involuntary part time workers to the 2.2 million of the marginally unattached and the 15.1 million of reported unemployed, the equation sums to 26 million Americans out of work.

Until job loss turns to job creation, we have little chance for a true economic recovery. Absent job creation, little else matters. Consumers cannot spend, businesses will not invest and government budgets cannot balance. I believe employment is the leading indicator of our economy, and I take umbrage to the blind claim of laggard. Jobs are not created by big businesses that house under 20% of America's labor force, but rather by SMEs - small and mid-sized companies. These companies, the backbone of the American economy, have lost access to the traditional working capital loans upon which they depend to manage their businesses. As a consequence of the sudden dearth of capital available in this market, companies that might otherwise rationalize and survive the current economic downturn are laying off workers -- layoffs that will result in permanent job losses as, without access to capital, these companies have no choice but to liquidate. This phenomenon is driving not only permanent job losses, but also the eclipse of technology and the destruction of transferable industrial knowledge.

Our firm, Patriarch Partners, is built upon the premise that making money and making the world a better place are not mutually exclusive options. Since 2001, Patriarch has saved over 150 companies from liquidation and almost 250,000 jobs. And because this is what we do, we have a unique perspective on the number of companies that are on a desperate quest for capital in order to survive. As we do our diligence on these companies, we are touring America and the small towns whose livelihoods are deeply dependent on these companies and their survival. Let me touch on some of my most recent visits and what I see - in Little Falls, Minnesota, a third generation boat manufacturing town, employment sits well below 50% of 2008 levels and the town's restaurants and shops are shuttered because boat production is off by 70%. In Detroit, where we are in the process of a large automotive acquisition, unemployment nears 30% and the average home price has fallen from $90k in 2007 to $8,000 today because automotive suppliers have walked a quiet path towards forced liquidations and consolidation.

Job losses will not be stemmed until the liquidation of SMEs is stopped. This feat can be accomplished only by enabling access to capital. Lenders and borrowers face challenging credit conditions due to the economic downturn, while dealing with diminished revenues and depreciating collateral values. As such, in the face of this perfect storm, the most direct and rapid solution to stem job losses must be to incent private enterprise to originate and monetize rescue-financing loans for struggling SMEs. I have a plan: The SME Rescue Loan Program ("RLP") will access unused TARP funds already set aside for the PPIP Legacy Securities Program. Treasury originally intended that $75-$100 billion of TARP funds be used for PPIP programs to purchase toxic loan assets from bank balance sheets. Yet, as of today, only $30 billion has been allocated for use.

The PPIP Rescue Loan Program will initially use $30 billion for equity and debt investments. The RLP will be structured based upon similar constructions to those announced in the existing PPIP programs. Pre-selected investment managers will raise a minimum of $150 million in equity capital, which will then be used along with $50 million of equity contributed by the Treasury. Private sector equity capital will serve as the first loss layer to both the loans and equity capital provided by the taxpayer. While the taxpayer will share in the returns, private investors -- not the taxpayers -- will bear the majority of the risk. Additional leverage, of up to four times equity, will then be provided by TARP funds. It will be required that at least $15 million (or 10%) of equity in the Rescue Loan Investment Partnership (RLIP) originates from direct investment by the investment manager's firm or partnership.

The RLP will be available to companies who have been turned down by banks, whose loans are in default with banks, whose reserves on loans have increased over 10% in the last 12 months, or companies who require debtor- in-possession financing during bankruptcy restructuring. All loans will need to be senior secured, pay current interest and stand first in right of payment.

In short, the RLP will function under the existing PPIP. The program's configuration will be built upon structures previously announced in the existing PPIP Legacy Securities Program. The program will require no additional funding from Congress. The RLP will save jobs, in a manner that can be immediately effective and quantified, by means of a combined private and public sector solution. The private sector equity will absorb the entire first loss, in advance of both the government loans and the government equity contribution, significantly reducing taxpayer risk. The government program will be temporary and will be replaced with both private sector and bank financing as the credit markets recover.

As a woman who walks and talks Main Street, I fear that we will grow complacent and rationalize high unemployment as status quo and the new norm. It is and will forever be unacceptable and will serve only to weaken our nation. We must end joblessness in America now.

More information available at: www.smerescueloans.com

http://www.huffingtonpost.com/lynn-tilton/...e_b_332765.html

Les Leopold: Why Billionaires Should Pay for the Jobless Recovery
from The Huffington Post by Les Leopold

We are entering the billionaire bailout society.

For the past thirty years we have minted billionaires, and we have created the most unequal distribution of wealth since 1928-29. This didn't happen by accident. We deliberately deregulated the financial sector and we deliberately eliminated the steep progressive taxes on the super-rich that had kept in check our income distribution.

By unleashing capital and finance we were supposed to get an enormous investment boom in real goods and services. Instead we got a fantasy finance boom as Wall Street marketed derivatives to those with excess capital.

We also got the biggest crash since the Great Depression.

Perhaps the most dramatic measure of our emerging billionaire bailout society is seen by comparing compensation for the top 100 CEOs and to that of average workers (the 100 million or so non-supervisory production workers). In 1970 the ratio was 45 to 1. By 2006 it was 1,723 to one.

Another critical feature of the billionaire bailout society is the creation of institutions that are too big to fail. Historically, our anti-trust division was supposed to prevent that. But it became another casualty of our grand deregulatory experiment. So financial institutions grew to the point where their failure would bring down our system. We tested that idea last fall when we let Lehman Brothers go under: It crashed global financial markets and moved us to the brink of a depression.

So in our billionaire bailout society we bail them out instead of breaking them up. We bail out all of them - not just the basket cases like A.I.G, Citigroup, GM etc. The popular media line is that once a financial institution repays TARP, it no longer is on government welfare. No so.

TARP is only one of the many government bailout programs that pours billions into the coffers of Goldman Sachs, JP Morgan Chase and, Morgan Stanley. Their bottom-lines and bonuses, for example, were fattened when we allowed A.I.G. to pay off its bets (with our money) at par value to these large financial institutions. Had A.I.G. gone under they all would have been on the edge of collapse.

As Joe Nocera put it in the New York Times :

So let's add it up: the $12.9 billion in A.I.G. help, the $10 billion in TARP, the F.D.I.C. guarantee program, the easy money trading distressed securities into the TALF program. I can't say for sure how much of the $16 billion the firm has set aside for bonuses can be attributed to government assistance of one form or another. But it's got to be a fairly substantial amount -- at least $2 billion or $3 billion.


And that's a very conservative estimate. It might be the case that the entire bonus pool is equal to the subsidies pulled in from taxpayer support. But this is to be expected in our billionaire bailout society.


Perhaps the most damaging feature of our billionaire bailout society is the "jobless recovery." This oxymoron refers to an economy that is growing, but that can't produce nearly enough jobs to reach full employment (an unemployment rate below 5 percent). Our current jobless recovery will be the worst ever. Right now the BLS (U6) jobless rate stands at 17.0 percent -- and climbing. (This counts those without work plus those who have part-time jobs because they can't find full-time work.) If the billionaire bailout society becomes permanent, we may never see full employment again.

Why is that? Because you don't need a full employment society to mint billionaires. Reflect for a moment on Goldman Sachs. They do not have individual depositors. They are not public brokers. They do not make loans to small business. They are in the business of making money by playing the financial markets, from mergers and acquisitions, from trading, and from creating and selling fantasy finance instruments.

In our billionaire bailout society these are unquestioned positive activities. But what value do they produce in the real economy? What is their contribution to market efficiency? How do they lower the cost of capital? How do these activities create jobs in the real economy? Good luck answering those questions because they don't do any of that. They just make money for themselves while producing little or no value to our society.

It's obvious we need to break up these large institutions so that we won't have to bail them out the next time around -- which may come sooner than expected given the lack of jobs and the fact that the financial casino is open again.

But we can't solve the bailouts without addressing the billionaire part of the equation.

Two years ago the richest 400 Americans had a combined wealth of $1.57 trillion. Last year during the crash their wealth dropped to "only" $1.27 trillion. Now they are set to rise again. We need to tie their wealth of our richest to putting our people back to work.

Here's the simplest and most controversial approach: a 10 percent wealth tax on all those with more than $500 million -- until unemployment drops below 5 percent. The money collected would come to about $150 billion a year. That money should be directly invested in public works programs to put our people to work -- a Green Corps to weatherize every home and office in the country -- a Youth Corps to provide work for unemployed high school and college graduates.

(I realize that many Americans detest the idea of taxing anyone's assets, even billionaires'. But let's be realistic: That's where our society's wealth has gone and we need that wealth to put people back to work. Some billionaires do create large numbers of jobs, but not enough. They can contribute more and not feel a bit of pain or suffering.)

To break away from the billionaire bailout society we need to tie the creation of wealth to the creation of work. We no longer have a system that can produce an adequate number of jobs through the normal working of the business cycle. The invisible hand of the market just won't do it. That's why it's called a jobless recovery. We need direct intervention.

But more importantly, we need to end our pell-mell slide into the billionaire bailout society in which everyone is out for themselves. We need to pull together to create a full employment society that can tackle our most pressing needs. Billionaires, no matter how thoughtful, kind, generous and inventive, can't do that for us.

We once understood that the common good required full employment. We once understood that the common good was more precious than individual riches. We once believed that public service to achieve such goals was a high calling. I hope that spirit still lies within us.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.
More on Goldman Sachs

Caterpillar cuts 2,500 jobs, ends some layoffs

http://www.alternet.org/rss/breaking_news/...s_some_layoffs/

Financial Support for the Unemployed Dries Up at the Worst Possible Time
Marianne Hill, Dollars and Sense
Politics: Think you can count on unemployment insurance if you lose your job? Think again.

http://www.alternet.org/politics/143278/fi...t_possible_time

Millions of workers have lost their jobs in the current recession. Employment is down 12 percent in manufacturing, 7 percent in professional and business services, and more than 5 percent overall in the private sector compared to last year. Over 5.6 million people have lost their jobs since last June. The ranks of the unemployed are continuing to grow; the unemployment rate in June hit 9.5 percent. Good thing that unemployment insurance provides income to help tide these workers over this rough patch, right? Not so fast.

The share of unemployed workers receiving benefits has gradually shrunk since the 1970s. In 1975, over half of unemployed workers received regular benefits. But in 2008, only 37 percent of the unemployed did; in some states the figure was less than 25 percent. And so-called “discouraged workers,” those who want but are not actively seeking employment, are not considered part of the labor force and so are not even included in these figures.

Unemployment insurance, in short, is not a benefit that everyone who loses a job can count on. Several groups are working to change this. The American Recovery and Reinvestment Act (ARRA), better know as the Obama stimulus package, provides temporary funding for states that expand their unemployment coverage, and so far this year 25 states have done so. Others, however, are resisting even a temporary expansion of coverage that would be fully federally funded.

Why Unemployment Compensation?

When unemployment insurance was established as a nationwide program in 1935, it was hailed as a means of enabling workers to protect their standard of living between jobs. With it, workers are better able to keep their homes and their health. It helps to stabilize family well-being and maintain the labor force in a region. By enabling workers to engage in longer job searches, unemployment compensation also improves workers’ job choices. It even enhances employers’ flexibility in hiring by making lay-offs less painful.

Unemployment insurance is also an important countercyclical tool: it bolsters consumer spending during economic downturns and then automatically drops off as the economy recovers and unemployment falls. Because it reduces the need for other forms of government intervention to raise demand in a downturn, the program has supporters across the ideological spectrum.

Coverage and benefits vary by state. The average weekly benefit in 2008 was $300—about 35 percent of the average weekly wage. Benefits are paid from state funds that are financed by a payroll tax on employers. This tax is levied on anywhere from the first $7,000 to the first $35,300 of each worker’s annual earnings depending on the state; the national average is $11,482. The tax rate ranges from 0.83 percent to 5 percent of the taxable portion of wages, with a national average of 2.42 percent. (Who bears the cost of this tax is debated: economists have shown that whether or not a company is able to pass the cost of payroll taxes forward to customers or back to employees depends on conditions in its particular product and labor markets.)

Shifts in employment patterns and a tightening of eligibility requirements are behind the nationwide reduction in effective unemployment insurance coverage. Today almost 30 percent of the U.S. work force is employed in nonstandard work arrangements, including part-time, temporary, contract or on-call work, and self-employment. Most of these jobs are subject to the payroll tax that funds unemployment benefits—yet these workers often find they are ineligible. For instance, persons who are seeking only part-time employment do not qualify for unemployment benefits in many states. This affects women in particular, including heads of households, who often work part time due to dependent care responsibilities. People who work full time but only for part of the year may also find it difficult to qualify for unemployment benefits.

Many workers who are not eligible for benefits provide income that is critical to their families. In 2007, 41 percent of workers worked only part-time or part-year. Among heads of households, this figure, though lower, was still sizeable: in 2007, it was 32 percent overall and 42 percent for female family heads. Besides child care, elder care can also mean part-time or part-year work for many. Nearly one-third of working adults with older parents report missing some work to care for them.
Who Are the Unemployed?

Certain industries, regions, and workers are being hit harder than others this recession. In June, 15 states and the District of Columbia had unemployment rates of over 10 percent, but only one, North Dakota, had an unemployment rate below 5 percent. Michigan, Oregon, South Carolina and Rhode Island all had seasonally adjusted jobless rates of 12 percent or more.

Unemployment hits some population groups much harder than others—young people, people of color, and anyone with relatively few years of education. Among workers over 20 years of age, black men had the highest jobless rate in June at 16.4 percent. The rate for Hispanic women was 11.5 percent, for black women 11.3 percent, and for Hispanic men 10.7 percent. In contrast, the jobless rate was under 10 percent for both white men (9.2 percent) and white women (6.8 percent).

A combination of factors including occupational segregation, lower educational levels, and discrimination result in lower incomes for women and for black and Latino men, exacerbating the impact of higher unemployment. Data from 2005-2007 show that black women working year-round, full-time earned $15,900 a year less than white men; for Hispanic women the wage gap was $21,400.

Lower-income families have fewer assets to see them through rough economic times, and their extended families are also hard-pressed as demands upon them increase. Nonprofits, another part of the social safety net, suffer from increased demand for services and decreased donations during recession. As a result, families of blacks, women and Hispanics suffer severe setbacks during a period of recession, and unemployment insurance can be especially critical to them.

Families in which one or more wage earners lose their jobs bear costs greater than just the lost wages. Savings are exhausted; rates of illness, both mental and physical, increase; debt levels often rise (inadequate medical insurance coverage is a major factor—in 2008, 60 percent of the unemployed lacked health insurance); and the pursuit of a college education or other training may be postponed. Studies have documen-ted a rise in suicide rates, mental and physical illnesses, and domestic and other violence among the unemployed. These problems become widespread during recessions and become a burden on society, not just on individual families.
Promising Initiatives

Under the Obama stimulus package, states that elect to expand their programs in certain ways receive federal funds to finance these changes for at least two to three years. States can make unemployment benefits more available in a number of ways:

* Changing the base period used to determine whether a worker qualifies for benefits and if so, the amount he or she will receive.
* Making unemployment insurance available to certain individuals who are seeking only part-time work and/or to those who lost or left their jobs due to certain compelling family reasons (for example, domestic violence or a spouse relocating).
* Providing an additional 26 weeks of compensation to workers who have exhausted regular unemployment benefits and are enrolled in and making satisfactory progress in certain training programs.
* Paying an additional dependents’ allowance of at least $15 per dependent per week to eligible beneficiaries.



Another potential reform relates to the extension of benefits beyond the regular 13- to 26-week period. States are required to offer extended benefits during periods of especially high unemployment (with half the cost covered by the federal government) only if certain trigger requirements are met—and that does not happen often. The ARRA offers states the option of adopting a new, less stringent trigger requirement. As of mid-July, 29 of the 30 states adopting the new trigger requirements have had extended benefits go into effect, compared with only six of the 20 states that have kept earlier triggers. Last year Congress authorized a separate program, Emergency Unemployment Compensation, to provide federally funded benefits after regular benefits are exhausted. The National Employment Law Project estimated that about 1.2 million workers would exhaust their benefits under this program before July 2009 and so become eligible for extended benefits.

A permanent expansion of coverage to a larger share of the unemployed, with or without an increase in benefit levels, would cost more than the average $23 per month in unemployment insurance taxes currently paid per worker. This gap could be filled by expanding the portion of wages on which the tax is levied. To reduce the negative impact on low-income workers, this could be accompanied by adjustments to the earned income tax credit.

Even if the reforms contained in the Obama administration’s stimulus package were fully enacted, benefits and coverage would be low in the United States in comparison to Europe. Much remains to be done to ensure minimal income security here. As the unemployment rate approaches 10 percent, it is time to revamp our broken system.

Past clues to the present jobless recovery
James A. Cooke
Why is this nation headed towards a jobless recovery? Simple. It's because our economy is undergoing a structural change that will make it more difficult for unemployed Americans to find work. More

http://www.americanthinker.com/2009/10/pas...ent_jobl_1.html

It pays to work for the government
October 26, 2009
Fat salaries justified for the same reasons as corporations - who are being ordered to cut pay of executives. More
http://www.americanthinker.com/blog/2009/1...the_govern.html

A desert for jobs and no end in sight: While millions of workers are struggling to get by on inadequate unemployment benefits, millions more are cut off completely as joblessness rises, reports

http://socialistworker.org/2009/10/26/a-desert-for-jobs

The Credit Crunch Is Still A Problem, And It's Preventing Job Growth
from Clusterstock by Vincent Fernando

In some parts of the economy, liquidity isn't exactly rampant.

Whether due to caution on the part of banks or their corporate clients, commercial and industrial loans have continued to shrink at an alarming pace, as a percentage of U.S. GDP.

John Mauldin: Banks, as I have written, are buying US government debt in an effort to shore up their balance sheets. Lending to small business, the real engine of job creation, is sadly decreasing each month.

The chart below, taken from the excellent site Econompic, shows that this trend actually appears to be getting even worse, despite other signs of improvement in the economy. Econompic used data from the Bureau of Economic Analysis (BEA) and the St. Louis Fed.

Loans Ind

We would venture to say that we need to see this trend improve before we'd get too hopeful on the employment front. Companies that either aren't confident enough to take out loans or aren't able to access capital are hardly in a position to expand their work force.

http://www.businessinsider.com/where-the-c...-strong-2009-10

U.S. Jobless Rates Rise Again in September; Large Divergence Between States
from SeekingAlpha.com: Home Page by Marketing Charts
Marketing Charts submits:

Following the release of discouraging overall unemployment data for September 2009, the Bureau of Labor Statistics has released a state breakdown of September 2009 unemployment that shows US jobless rates have increased in all 50 states and the District of Columbia since September 2008.

On a month-over-month basis, however, the picture is more mixed. Unemployment rates have grown since August 2009 in 23 states and the District of Columbia, decreased in 19 states, and remained flat in eight others, Retailer Daily reports.

Complete Story »

http://seekingalpha.com/article/169189-u-s...tes?source=feed

A sustainable recovery with 530,000 weekly claims?

That’s what we seem to be expecting based on the huge uptick in equities since March. While stock markets have long since moved it up a gear, the employment market is stuck in neutral. The latest seasonally-adjusted jobless claims numbers came in at 530,000. The widely-followed four week average is still 526,250 and is not [...]

http://www.creditwritedowns.com/2009/10/a-...kly-claims.html

US Workers Starved Into Service

by Sandy Leon Vest

It was only a matter of time before the nation’s skyrocketing unemployment translated into new recruits for the most powerful military force in the world.

With the official US unemployment rate at 10 percent and climbing (that’s more than 15 million people struggling to put food on the table) and nearly double that number if you include part-time wage-earners who need full-time jobs, never mind all of those ‘discouraged workers,’ it’s little wonder that so many of the nation’s jobless are flocking into its military recruitment offices.

After all, what better way for an unemployed American worker to survive the Great Recession of 2009 than in the ‘service’ of his or her country?

Americans have a long history of consuming and/or killing their way out of crisis. And it isn’t looking as if that model will be up for reassessment anytime soon. The parameters of what we like to call the “national conversation” are as narrow as ever, and they are not widening under the current leadership. So far at least, even Obama’s ‘Clean Energy Economy’ has failed to deliver enough ‘green jobs’ (or any other color jobs for that matter) to begin the process of meaningful transition. With the season of consuming just around the corner, many Americans – especially those in blue collar jobs like construction, manufacturing and retail service – are staring into the economic abyss.

It is hardly surprising in such an environment that a young person with dismal employment prospects and plummeting self esteem would be easily seduced by an ad that promises “more than $49,000 in GI Bill Benefits” as does the US military’s current promo. The same ad promises that young recruits can “connect with military and veteran-friendly schools that offer VA approved education programs,” or “get information” about high-paying degrees like Criminal Justice, IT and Legal Studies.

So, when the Pentagon announced on October 13, 2009 that the military had met all of its recruitment goals for the first time since 1973, and that this just happened to coincide with the highest national unemployment rate since the government started keeping track in 1976, it wasn’t surprising that the news was met with a Big National Yawn.

The Few, the Proud, the Desperate

It’s hard not to wonder what would happen if, instead of dutifully reading from the Pentagon’s script on October 13, the media had done their job and informed the public about the real nature of the ‘service’ that potential enlistees were signing up for. Maybe if they had, those recruitment officers would not have been quite so busy recruiting – and stealing the lives of – unsuspecting young people in desperate need of employment.

Maybe those eager masses of young men and women wouldn’t have been so hot to sign up if, for instance, they understood that anyone enlisting in the military right now – whatever branch – is required to sign a document that states: "Laws and regulations that govern military personnel may change without notice to me. Such changes may affect my status, pay allowances, benefits and responsibilities as a member of the Armed Forces REGARDLESS of the provisions of this enlistment/re-enlistment document.” (DD Form4/1, 1998, Sec.9.5b).

In their book Army of None, published in 2007, Aimee Allison and David Solnit advise those who expect the military to pay for their college to “read the fine print.” The authors point out that only a fraction of recruits who signed up for the Montgomery GI Bill received a dime, and that 65 percent “received no money at all for college.” If you receive a less than honorable discharge (as one in four do), leave the military early (as one in three do), or later decide not to go to college, “the military will keep your deposit and give you nothing.”

And when it comes to those signing bonuses, maybe if potential recruits understood that they will be forced to repay the money if he or she leaves the military before the agreed term of service (that’s eight years for first time enlistees), perhaps they would reconsider signing away life and limb to get it. If those same applicants understood the army data from 2007 revealing that the top bonus of $20,000 was given to only 6 percent of enlistees who signed up for active duty, they might have figured out another way to survive the recession. They might be further divested of their illusions if they knew that military statistics show that 48 percent of enlistees report having “financial difficulty” and that some 33 percent of homeless men in the US are veterans, with nearly 200,000 veterans homeless on any given night.

And another thing: The military does not have to place recruits in their chosen career field or give them the specific training requested. Even if enlistees do receive training, it is often to develop skills that will not transfer to the civilian job market – like firing an M 240 machine gun.

By the way: Military recruiters are notorious liars.

Back in 2004, the New York Times reported that nearly one in five US Army recruiters was investigated for offenses ranging from "threats and coercion to false promises that applicants would not be sent to Iraq." It’s doubtful that has changed just because the focus is now on Afghanistan. One veteran recruiter told a reporter for the Albany Times Union that, after recruiting for years, he couldn’t think of one recruiter who wasn't dishonest about it, admitting that, “I did it myself."

Military Service is Not the Only Option

Just because the Obama administration lacks the political courage to challenge the status quo doesn’t mean there are no other options. But Americans will need to ‘unlearn’ a lot of what we’ve been taught if there is to be a meaningful transition to a peacetime economy.

We will need, for instance, to unlearn that the military is the only legitimate form of national service. We will need also to be willing to challenge those who tell us that being an artist, a pre-school teacher or (god-forbid) an activist, is not a respectable way to earn a living – or to serve one’s country.

And while we’re un-learning things, maybe we should reconsider the US military budget.

By most estimates, maintaining the warfare state now consumes 54% of every federal tax dollar. Without first challenging that, we might as well kiss off any chances of ever seeing a ‘Clean Energy Economy’ or, for that matter, anything resembling a future worth living. But first we’ll have to rid ourselves and our children of the idea that a culture rooted in killing and consuming can also be ‘sustainable.’

Maybe then we’d have a real war tax revolution.

Since the turn of the century, a growing number of high-ranking military officers are questioning the wisdom of – and the motivation behind – the US warfare state. In an open letter dated July 8, 2004, Special Forces Vet Stan Goff wrote to US military troops in Iraq:

“The big bosses are trying to gain control of the world's energy supplies to twist the arms of future economic competitors. That's what's going on, and you need to understand it, then do what you need to do to hold on to your humanity … Your so-called civilian leadership sees you as an expendable commodity. They don't care about your nightmares, about the DU that you are breathing, about the loneliness, the doubts, the pain, or about how your humanity is stripped away a piece at a time. They will cut your benefits, deny your illnesses, and hide your wounded and dead from the public. They already are. They don't care. So you have to. And to preserve your own humanity, you must recognize the humanity of the people whose nation you now occupy and know that both you and they are victims of the filthy rich bastards who are calling the shots."

Humanity has passed the tipping point – economically, culturally and environmentally. The ‘consuming and killing’ model embraced by Americans as cultural norm is, in reality, a cultural aberration. It is destroying everything and everyone in its wake – including those who are fighting and dying to preserve it. In accepting such a model – often without question – Americans have become victims of their own complacency.

The price of such acquiescence may be our humanity.
Sandy LeonVest is a radio and print journalist and the editor-publisher of SolarTimes, an independent quarterly energy newspaper with a progressive slant. SolarTimes is available online at www.solartimes.org, and distributed in hardcopy throughout the San Francisco Bay Area and beyond. Sandy LeonVest's work has been published locally, as well as internationally, and includes 15 years at KPFA Radio in Berkeley, CA.

http://globalresearch.ca/index.php?context=va&aid=15880

Stimulus and the Jobless Recovery
Edward Lazear, Wall Street Journal, November 1, 2009
Jobs 'created or saved' is meaningless. What matters is net job gain or loss, and that means the unemployment rate.

http://online.wsj.com/article/SB1000142405...ss_opinion_main

JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS



COMMENTARY NUMBER 255
Brief Update - Friday’s Employment/Unemployment Release

November 4, 2009



__________



Employment Situation Continues to Deteriorate



__________



PLEASE NOTE: The next planned Commentary is for Friday, November 6th, following the release of the October employment and unemployment report.
– Best wishes to all, John Williams



Brief Update: Some Risk of Worse-Than-Expected Data for October Employment Conditions. As discussed in Commentary 254, the U.S. economy remains in a protracted and deep economic contraction, one that will continue to be unresponsive to traditional stimuli. Given the underlying reality of a weaker economy and a more serious inflation problem than generally expected by the financial markets, risks will favor higher-than-expected inflation and weaker-than expected economic reporting in the month ahead. Such is true especially for economic reporting net of prior-period revisions.

Payroll Employment and Unemployment (October 2009). Due for release on Friday, November 6th, expectations appear to be for a smaller decline in October payrolls than seen in September and for a minimal notch upwards in unemployment. Briefing.com reports a consensus expectations of a 175,000 (little changed from last week’s consensus of 166,000) jobs loss in October, following a 263,000 jobs decline in September, with the October unemployment rate increasing to 9.9% from September’s 9.8% level. Given that the economy remains much weaker than the consensus outlook, reporting risk here continues to be for worse-than-expected numbers.

Adjusting for prior-period revisions, an October jobs loss of 300,000 is within reason. Add to that a further 200,000 monthly jobs loss that is not being counted in the survey, and the total jobs loss likely is around 500,000 for the month. While that generally is consistent with the broad weakness in related series, the formal reporting of same is not likely until the benchmark revision publication in February 2010.

September’s headline unemployment rate to the second decimal point was 9.83%, just 0.02% shy of rounding up to 9.9%. As a result, with continued deterioration in official unemployment, 9.9% appears fairly safe for October, and 10.0% is within easy reach. With yesterday’s off-year election having gone generally against the Democrats, a substantial new stimulus package from the federal government — one aimed at helping the economy before next-year’s mid-term election — likely will be proposed shortly. The headlines surrounding the odometer event of the unemployment rate rolling up to 10.0% would help a new stimulus push. Accordingly, that 10.0% (9.95% or a statistically insignificant gain of 0.12% from September would do the trick) might be offered up to the public on Friday, instead of a month from now.

As to related underlying reporting, help-wanted advertising is contracting. The Conference Board’s newspaper help-wanted advertising index for September (a leading indicator to October’s employment report) fell to a new record low of 9, from the prior low of 10 that had held for the preceding four months. This new 58-year low is a very negative signal for background employment conditions. While some of the weakness in this index of recent years has been due to ads shifting from newspapers to the Internet, near-term relative changes remain significant indicators of pending employment activity.

Confirming the declining trend in print advertising, the Conference Board’s online help-wanted advertising also has been in monthly decline, with year-to-year change for new ads down 24.6% in October, versus an annual decline of 25.7% in September. The declining online data are leading indicators of activity to both the October and November employment reports.

The October purchasing managers surveys were negative for Friday’s reporting but mixed in their employment signals for next month. On the manufacturing side, the employment diffusion index (a reading of 50.0 or above is expansion) jumped from 46.2 in September (leading indicator to October employment reporting) to 53.1 in October (leading indicator to November reporting). On the non-manufacturing side, the index fell from 44.3 in September (leading indicator to October employment reporting) to 41.1 in October (leading indicator to November reporting).

The overall strong results for the manufacturing series are suspect and should prove to be fleeting, since consumption is not growing, which means that any production gain is feeding an involuntary but temporary buildup in inventories.

New claims for unemployment insurance have been fluctuating around 530,000 per week for the last six weeks, well off the 650,000 peak average seen back March and April of 2009. The current base level, however, is around where it was in fourth-quarter 2008, when monthly payroll jobs losses were averaging about 550,000. That number, though, was before the first-quarter 2009’s big reporting error developed, per last month’s BLS announcement of the pending major downward revisions to data that will be forthcoming when the March 2009 benchmark revision is published in February 2010. The pending benchmark adjustments suggest a 200,000 shortfall per month in current accounting for monthly jobs loss.

As a point of clarification, the weekly new claims number has only a partial relationship to the reported monthly payroll jobs change. The monthly payroll employment change reflects the prior payroll balance, less jobs lost, plus jobs gained.

These underlying related economic series, again, are leading indicators to the government’s employment and unemployment reports. The employment and unemployment numbers are "coincident" (not the popularly touted "lagging") indicators of broad economic activity. The U.S. economy remains in recession/depression.

Employment Report: 190K Jobs Lost, 10.2% Unemployment Rate
from Calculated Risk by CalculatedRisk
From the BLS:

The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarm payroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today. The largest job losses over the month were in construction, manufacturing, and retail trade.

Employment Measures and Recessions Click on graph for larger image.

This graph shows the unemployment rate and the year over year change in employment vs. recessions.

Nonfarm payrolls decreased by 190,000 in October. The economy has lost almost 5.5 million jobs over the last year, and 7.3 million jobs1 during the 22 consecutive months of job losses.

The unemployment rate increased to 10.2 percent. This is the highest unemployment rate in 26 years.

Year over year employment is strongly negative.

Percent Job Losses During Recessions The second graph shows the job losses from the start of the employment recession, in percentage terms (as opposed to the number of jobs lost).

For the current recession, employment peaked in December 2007, and this recession was a slow starter (in terms of job losses and declines in GDP).

However job losses have really picked up earlier this year, and the current recession is the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only early '80s recession with a peak of 10.8 percent was worse).

The economy is still losing jobs at about a 2.2 million annual rate, and the unemployment rate is finally above 10%. This is a very weak employment report - just not as bad as earlier this year. Much more to come ...

1Note: The total jobs lost does not include the preliminary benchmark payroll revision of minus 824,000 jobs. (This is the preliminary estimate of the annual revision that will be announced early in 2010).

http://www.calculatedriskblog.com/2009/11/...s-lost-102.html

The jobs deficit:

Jobs Report Preview
Catherine Rampell, Economix, November 5, 2009
On Friday, the Bureau of Labor Statistics will release the jobs report for October. Here's what to look for.
http://economix.blogs.nytimes.com/2009/11/...port-preview-2/

In the name of jobs, ideas that won't work
Steven Pearlstein, Washington Post, November 6, 2009
With the throw-the-bums-out results of this week's elections and the prospect that the unemployment rate is about to break through the 10 percent mark, politicians in Washington are desperate to show that they're doing something about jobs.
http://www.washingtonpost.com/wp-dyn/conte...opinion/columns

New Business, Not Small Business, Is What Creates Jobs
Carl Schramm, Robert Litan and Dane Strangler, Wall Street Journal, November 5, 2009
Nearly all net job creation since 1980 occurred in firms less than five years old.
http://online.wsj.com/article/SB1000142405...ss_opinion_main

Obama Faces His Anzio
Paul Krugman, New York Times, November 5, 2009
President Obama chose a cautious approach rather than bold action on the economy, and the decision may haunt Democrats for years to come.
http://www.nytimes.com/2009/11/06/opinion/...rss&emc=rss

Rosenberg: “the mother of all jobless recoveries”

While I see the job numbers as pretty much what was expected, the data do make clear that we are seeing a major jobless recovery. David Rosenberg has a piece out today that goes right to the heart of the issue:

All we can say is that if the overwhelming consensus is correct that the recession is behind us, then what we have on our hands is the mother of all jobless recoveries and whatever economic growth is being squeezed into the system comes courtesy of the most dramatic intervention by the government in recorded history, including the New Deal 1930s era. President Obama is now running fiscal deficits that would have made FDR blush.

But while Uncle Sam can try and stimulate spending on autos and housing and even mortgage credit via the myriad of policy measures that have been undertaken, the return to job creation is as elusive as ever. It is hard to fathom that, according to the White House estimates earlier this year, the stimulus was supposed to help cap the unemployment rate at 8.5%. Here we are today with both an unemployment rate and a fiscal deficit-to-GDP ratio both north of 10%. While real GDP did manage to rebound at a 3.5% annual rate in Q3 — stagnant if not for the government incursion — those dual 10%-plus figures cited in the previous sentence highlight the fact that GDP is not the only barometer of a nation’s economic health.

TODAY’S HEADLINE PAYROLL PRINT CONTAINED TROUBLING SIGNPOSTS
While the government can try to induce people to spend, no recovery can be sustained without a resumption in job growth and October’s employment data contained some troubling signposts.

While the -190,000 headline nonfarm payroll print was not that far off the consensus, and while there were upward revisions to the prior two months (of over 90,000), the major problem is that the Establishment Survey, at this time, is missing a very important part of the story, which is the strain that the small business sector continues to face. Small businesses have less cash on the balance sheet, less access to credit and less exposure to overseas growth dynamics compared to large companies. The Establishment Survey (nonfarm payrolls), has a “large company” bias that the companion Household Survey does not have. If you look at the historical record, you will find that at true turning points in the economic cycle, the Household Survey leads the Establishment Survey. This has always been the case heading into expansions and into recessions.

My interpretation of this is threefold:

* The headline data understate the severity of the problem because of “large company” bias and a low labor force participation rate. In reality the U-6 number of 17.5% is more reflective of the state of the economy – and that is a depressionary number.
* To the degree you expect the recovery to continue, labor force participation rates should be increasing, not decreasing. In my previous post, I failed to point this out, leading to the conclusion I saw the data as a net positive. I see the data as a net wash – as it was in line with expectations. However, when discouraged workers come back into the labor force, we are going to see a much higher headline unemployment rate.
* Given the fact that unemployment is pointing to depression but we are in a recovery, you should conclude that this recovery will fade once government stimulus is removed.
http://www.creditwritedowns.com/2009/11/ro...recoveries.html

Comprehensive unemployment rate is 17.5%

The employment market is pretty grim. We’re talking a double digit unemployment rate – and that’s just the base rate. The comprehensive unemployment rate is now 17.5% in the US. This is a fact not lost on our politicians. Today, Barack Obama signed a bill that extends unemployment benefits and home buyer tax credits. But,, let’s parse the data to get a real read of what’s happening.

The household survey

The unemployment rate is based on a household survey. Basically, the Bureau of Labor Statistics (BLS) asks a bunch of people, “do you have a job? No? Are you looking? By asking enough different people these questions, the BLS can produce a statistic to represent the nationwide unemployment rate. That number is currently 10.2% – or 15.7 million of a labor force of 154.0 million in a population of 236.6 working age folks.

The two things to note are the rate 10.2% and the participation rate, now 65.1%, the lowest in 23 years. What this is telling us is that the actual toll of joblessness is much higher than 10.2% because a lot of people have given up looking for jobs.

The numbers above are all seasonally-adjusted. So, the true picture could be somewhat better because without adjustments the number of unemployed is actually 14.5 million, 9.5% of the active labor force and down from 15.2 million in August. Either way, it’s still a grim picture.

I actually like to watch year-on-year data as an indicator of directionality. On this front, the report is looking much better. The increase in the number of unemployed is down from a peak of 6.0 million (6.2 million unadjusted) to 5.5 million (5.1 million unadjusted). So the year-on-year rate increase is now 3.6%, down from 3.9% in June. Again, these numbers are grim (the peak y-o-y change was 1.8% in 2001, for example). But the direction of change is now down.

The establishment survey

This is where the BLS gets non-farm payrolls (NFPs), the number of job losses per month. Non-Farm Payrolls (130.8 million) are now at their lowest level since March 2004 (also 130.8 million). And if one goes back to the period before the previous recession, NFPs were 132.5 million in February 2001. That means we have lost 1.7 million jobs over a nine-year time frame. This is an ugly data point.

The silver lining here is that both unadjusted data and y-o-y changes are better. NFPs are now 132.0 million unadjusted and that is up 1 million from 2 months ago. year-on-year changes are now falling. Translation: the labor market is still grim, but the worst is over.

My read of the data is this: There were no big surprises. I expected losses of 200,000 based on the ADP number and the jobless claims numbers. Yes, there was a jump in the unemployment rate, but jump was misleading because of a falloff in the labor participation rate. On the whole, the employment market is weak, but it is not deteriorating. Can we sustain a recovery even so? Probably.

The Ugly Unemployment Numbers

The headlines said unemployment, as measured by the "establishment survey," was down by 190,000; and even though that was slightly worse than forecast, market bulls were cheered by the fact that the number was not as bad as last month's. It is an improvement that we are not falling as fast.

Well, maybe. What I did not see in many of the stories I read was that the number of unemployed actually soared by 558,000, to 15.7 million, as measured by the household survey. The establishment survey polls larger businesses; the household survey actually calls individual households.

Let's look at the real number in the establishment survey. If you don't seasonally adjust the number, the actual change in unemployment for October was 641,000, or about 450,000 more than the seasonally adjusted number. And the Bureau of Labor Statistics added 86,000 jobs that they simply guess were created through the so-called birth-death ratio. Interestingly, the birth-death ratio number is not seasonally adjusted, so it is just added to the unemployment number. http://www.bls.gov/web/cesbd.htm

The total (U-6) employment rate is at a record high of 17.5% (this includes those who are part-time for economic reasons). There are now over 10.5 million people who have lost their jobs since the beginning of the downturn.

My favorite slicer and dicer of data, Greg Weldon (www.weldononline.com), offers up an even more horrific number. As I have noted before, if you have not looked for work in the last four weeks, the BLS does not count you as unemployed. Quoting Greg:

"Moreover, when we combine the monthly change in the number of Unemployed, with the number Not in the Labor Force, we might consider the result to be a proxy for the actual 'change' in the underlying labor market situation ... in which case, October's figure of 817,000 represents the fourth LARGEST yet, behind last month's (September's) second largest figure of 1,021,000 ... for a two-month combined figure of 1.838 million, in newly Unemployed, or no longer 'in' the Labor Force ...

"... the second LARGEST two-month total EVER posted, barely trailing the December-08/January-09 total 1.955 million.

"Bottom line ... basis this measure AND the 'Total Unemployment Rate,' we could conclude that not only is there NO 'improvement' in the labor market, but moreover, that it continues to DETERIORATE, intently."

Comparing This Recession to Previous Ones: Job Losses
New York Times
One of the severe problems with this economic downturn is the introduction of Orwellian language to “manage” it. Before this recession, no president or ...

http://economix.blogs.nytimes.com/2009/11/...s-job-losses-4/

NY Times: Unemployment Measure U-6 Highest Since Great Depression

by CalculatedRisk on 11/06/2009 11:59:00 PM

From David Leonhardt at the NY Times: Broader Measure of Unemployment Stands at 17.5% Excerpts:

Officially, the Labor Department’s broad measure of unemployment goes back only to 1994. But early this year, with the help of economists at the department, The New York Times created a version that estimates it going back to 1970.
...
If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.

In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous high was 17.1 percent, in December 1982.

There is much more in the article, but this suggest that the BLS' "Alternative measure of labor underutilization U-6"1 is now at the highest level since the Great Depression.

1 "Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers"

A Reader Asks "How Did 558,000 People Lose Their Jobs When Only 190,000 Jobs Were Lost?"


Here is an excerpt from today's Bureau of Labor Statistics Non-farm Payrolls report.

"The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarm
payroll employment continued to decline (-190,000), the U.S. Bureau of Labor
Statistics reported today. The largest job losses over the month were in con-
struction, manufacturing, and retail trade.

Household Survey Data

In October, the number of unemployed persons increased by 558,000 to 15.7
million. The unemployment rate rose by 0.4 percentage point to 10.2 percent,
the highest rate since April 1983. Since the start of the recession in
December 2007, the number of unemployed persons has risen by 8.2 million,
and the unemployment rate has grown by 5.3 percentage points...

The civilian labor force participation rate was little changed over the month
at 65.1 percent. The employment-population ratio continued to decline in
October, falling to 58.5 percent."


An astute reader noticed that the BLS press release says that 190,000 jobs were lost from payroll employment, but the number of unemployed persons increased by 558,000. What's up with that?

The BLS report consists of two independent data samples. BLS has two monthly surveys that measure employment levels and trends: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey.

There is the "Establishment Survey" which is based on responses from a sample of about 400,000 business establishments, about one-third of total nonfarm payroll employment. The headline payroll number, the job loss of 190,000, is based on this data.

Then there is the "Household Survey" which is a statistical survey of more than 50,000 households with regard to the employment circumstances of their members, which is then applied to the estimates of the US population to obtain the unemployment number. This survey was started in the 1950's and is conducted by the Census Bureau with the data being provided to BLS. It is from the household survey that more detailed information is obtained about employment statistics within population groups like gender and age, wages, and hours worked. It is this study that is responsible for the unemployment rate of 10.2%.



So which survey is correct? Neither. The truth is somewhere in between.

The most obvious reason for the discrepancy is that job creation in the US seems to be centered in the smaller business and the self-employed areas in recent years. These sectors are not polled by the BLS and their impact would only be obtained by the Household Survey's interviews.

The BLS does have a way to account for this called the "Birth Death Model" which is supposed to estimate jobs created by smaller businesses. That model is a bit of a joke actually since it almost always follows the same pattern of adding jobs, with two big corrections in January and July of each year when it will do the least damage to the headline number. Any model that does not reflect the job declines that started in 2007 can most certainly be called a statistical joke. Small business is not immune to business cycles.



The payroll survey for October will be revised several times in the short term, with each release of monthly data, and even larger revisions will be done periodically, every year or so, to correct the whole series and sometimes dramatically.

The household survey is not revised per se, but the data against which it is statistically evaluated, the census data of the population, will be revised and this will change the representation of the monthly samples. Let's hope that lowering of the population is only done by revision of the numbers, and not the more draconian things practiced throughout the earlier part of the 20th century.

There was a famous joke that the Household Survey and the Establishment Survey were synchronized under George W. Bush by getting rid of people, by lowering the estimates of the population that is, which is something his pappy did when he was the president. In the states there will be a new Census conducted in 2010 as you yanks may already know, so we will have to see if the census bureau's population estimates are lowball or highball.

So what are we to conclude from this?

First, that Wall Street and the government use the monthly jobs data as tools to achieve their particular ends, to justify programs, to buy and sell, to promote certain ideas and behaviours in the public. Secondly, people will believe what they wish to believe to suit their biases if they are not fact-based in their thinking.

The truth is more clearly demonstrated in the long term trends, the averaging of the data over time. It does not seem that the long term data is as manipulated as the Consumer Price Index information which has become a statistical disgrace with its hedonic adjustments.

So what do we do, the average person with too little time and too many other priorities, at times seemingly held captive by the flows of information from the mainstream media? As always, we must sift what the government and business tell us, with a keen eye for deception which is an unfortunate part of human nature especially when things are not going well and it is easy to rationalize many things, and do what seems to be the right thing based on our own judgement and a broader analysis of all the news.

Frank Veneroso: Employment Losses Probably Continue at a 300,000 a Month Rate

Posted: 08 Nov 2009 12:29 AM PST

From Veneroso Associates’ US Economy October Employment Report, ” Huge Discrepancy Between the Payroll and Household Surveys:

Executive Summary

1. According to BLS, payrolls fell at a 188,000 a month rate over the last three months. But their own household survey says employment fell at a 589,000 a month rate.

2. Why the discrepancy?

3. Chris Manning of the BLS told us last month that payrolls were overestimated in the twelve months ending March by 824,000. The source of this error was the birth/death model. BLS used “plug” numbers for the number of births and deaths. These “plug” numbers were wrong. They led to estimated positive contributions to employment that were too high. Most of the error (675,000 out of a total 824,000 jobs) occurred in the first quarter of this year. The birth/death model was adding significantly to payrolls when all other payrolls were falling. In reality the contribution from net births and deaths was in fact negative.

4. Manning told us that the faulty birth/death model was still being used for the months after March of this year. The implication was that the faulty birth/death model would continue to overstate payrolls and understate the payroll job losses in the months since March.

5. And, in fact, the BLS is doing just that. For the last three months they are assuming net birth/deaths have added 18,000 jobs a week. Last year over the same period they assumed it added 17,000 a week, the year before 18,000 a week, and the year before smack in the middle of the economic boom 18,000 a week.

6. It is obvious what BLS is doing. They are simply plugging in an extrapolated figure with zero adjustment for the most severe labor market contraction in three generations. And, worse yet, they know the birth/death number they are using is pure baloney.

7. NUTS!

8. Therefore, reality probably lies somewhere between the payroll survey monthly rate of job loss of 188,000 and the noisy household survey rate of job loss of almost 589,000. A best guess would be that jobs continue to be lost at a rate of 300,000 a month or more.

Payrolls were down 190,000. A slightly larger decline than the consensus. But prior payrolls were revised to show a lesser decline in August and September combined of 91,000. Payrolls with revisions declined only 99,000.

From a payroll survey perspective employment conditions are improving significantly. Not so from a household survey perspective.

The unemployment rate rose by .4%. I expected a rise, but only because I expected the sharp drop in the labor force in recent months to be partly reversed. In fact the labor force fell further by 31,000. The increase in the unemployment rate came entirely from another huge decline in the household measure of employment of 589,000. This followed declines of 785,000 in September and 292,000 in August. That is an average monthly rate of decline in employment of 589,000. That is as bad as it has been for the entire recession adjusted for population discontinuities.

The household survey of employment is a very noisy series. I was absolutely certain that, after the huge declines of August and September, we would see a much lesser decline in household survey employment in October. I thought that a decline of 200,000-300,000 would still signal serious employment weakness because of the huge declines in the prior two months.

No matter how noisy we think the household survey is, we have to take these household survey employment declines seriously. The three month decline may not be close to 1.8 million; it may be half that. It does not matter. A 300,000 a month rate of employment decline is very serious.

How can there be such a huge divergence between the household survey which now shows almost 600,000 job losses a month and the payroll survey which now shows average job losses of under 200,000 a month? Part of it, of course, is data noise. But part of it must be a continued overestimation of net positive job creation arising from the notorious birth/death model….

Therefore, reality probably lies somewhere between the payroll survey monthly rate of job loss of 188,000 and the noisy household survey rate of job loss of almost 589,000. A best guess would be that jobs continue to be lost at a rate of 300,000 a month or more.

Is this consistent with anything else? Yes. Though the manufacturing ISM showed a huge increased in its employment index, the non-manufacturing ISM showed a significant decrease to a low level. The vast majority of employment is in the non-manufacturing sector.

Also, if the rate of job loss was seriously contracting the work week should be rising. A move to a longer work week is often the first move by employers when labor conditions start to improve. The payroll survey shows a decline in the work week over the last three months and no improvement in the last month.

The latest initial and continuing claims suggest that there is some recent abatement in job losses. But they have probably continued at a significant rate and income destruction probably continues at a rapid pace….

As for the markets, they are so clueless at reading the fundamentals I have no idea how they will react to this data.

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Lloyds to Slash 5000 Jobs (Wall Street Journal)

http://online.wsj.com/article/SB125785251228240929.html

Employment and the Seasonal Adjustment
Calculated Risk, November 10, 2009
There is a strong and consistent seasonal pattern for employment, and I think the seasonal adjusted numbers are the ones to use.
http://www.calculatedriskblog.com/2009/11/...adjustment.html

Counting the Jobs Produced by the Stimulus
Gary Burtless, Brookings Institution, November 9, 2009
When the stimulus package was enacted last winter, the Administration said its goal was to create or save 3½ million jobs by the end of next year. How closely has the Administration come to achieving that goal?
http://www.brookings.edu/opinions/2009/110...s_burtless.aspx


As Unemployment Rises, Kids' Future Dims
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Forget frugality. Want to know what the true lasting impact of this Great Recession will be? Then take a look at the kids.
http://blogs.wsj.com/economics/2009/11/10/...ds-future-dims/

The Tussle Over Craig Becker
Richard A. Epstein, Forbes, November 10, 2009
The National Labor Relations Act at a crossroads.
http://www.forbes.com/2009/11/09/craig-bec...ed=rss_opinions

This is why the DJIA is over 10,000.

Sales down?

Easy.

Lay off a few thousand workers.

So we have a high stock market and high unemployment.

Only eventually you run out of people to lay off.

AOL Layoffs, Buyouts, And More Layoffs
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First cuts today, with the bigger ones to follow.
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http://www.businessinsider.com/henry-blodg...layoffs-2009-11

That 10.2% Unemployment Report Was The Best Thing That Could Happen To Stocks
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http://www.businessinsider.com/that-102-un...-stocks-2009-11

France Shows Us Our Future: Longer Work, Shorter Retirement
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Even Sarkozy knows the sun is setting on France's generous labor laws.
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http://www.businessinsider.com/france-show...irement-2009-11

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More than 5,200 fewer attorneys are gracing the halls of the top firms.
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http://www.businessinsider.com/2009-really...lawyers-2009-11

Not that anyone is shedding any tears for lawyers.

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http://www.businessinsider.com/henry-blodg...g-to-13-2009-11