Projecting "The Jobs Chart"

Tyler Durden's picture

By now the infamous Minneapolis Fed "change from pre-recession employment" jobs chart (all too often misattributed to other sources) has made popular folkore. Naturally, that's the chart which shows that 36 months after the start of the depression the change from peak employment pre-recession is just in a parallel universe of its own. The chart is presented below:

Yet what few if any have done is to extend and project what this chart may look like in the future. We have on several occasions attempted to predict how the "change from peak employment" chart will appear over the next several years. Below is our most recent attempt at predicting how many more months of recession we have assuming a gradual pick up in the economy (assumptions are presented in the chart). The chart shows that based on conservative economic pick up estimates, the depression starting in December 2007 will have 96 months to run before we reach the precession level in jobs.

And one big caveat: this chart does not assume a growth in the labor force, which is of course wrong, but as the latest BLS data indicate for some inexplicable reason the labor force continues to contract and is back to three decade lows. If we were to account for the roughly ~90,000 theoretical increase in baseline labor force increase per month (which will eventually catch up with the economy, manipulated BLS data notwithstanding), the pre-recession recovery will not occur for an additional 50-60 or so months, a result that is just so ridiculous that charting it would merely incite derisive laughter.


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Rahm's picture

(Steve) Jobs Bitches!

Sudden Debt's picture

I think you mean: (Benny B.) Q3 & 4 Bitches!


Bernanke’s QE3 faces stiff resistance


But from a personal experience stand I can say this: Nothing stays stiff for longuer then 30 minutes max. (unless you use a cockring, but that makes your balls turn blue).


the mad hatter's picture

Bring an end to the bailouts. Here is my plan.

My late night philosophizing and researching led me to this Q&A section with the founders of PayPal. In the video, Peter Thiel talks about how PayPal is NOT a bank but is a payment processor. They do not engage in fractional reserve lending.

The implication of this is huge. PayPal is the ONLY "full-reserve bank" in existence. They do not need FDIC insurance because they do not make any loans. PayPal cannot have a bank run by design.

Eric Cantana called for a European bank revolt via a withdrawal of funds into cash. That is highly unfeasible because digital cash and electronic payment is a necessity of modern life. Instead:

  1. Setup a PayPal account
  2. Sign up for a PayPal debit card so you can use your PayPal funds for daily purchases, etc
  3. Withdraw all your funds from your Bank of America or other "Too Big to Fail" banks to PayPal
  4. Use your Paypal funds to buy a physical ounce of silver or gold to put more pain to the COMEX naked short sellers. Hat-tip of this idea to Max Keiser of the Keiser Report.

The revolution/project mayhem begins now.

mixle's picture

Here are three issues with your proposals, dear hatter:

  1. PayPal is notorious for whimsically blocking accounts and payments (historically and recently with wikileaks), so I trust them very little
  2. PayPal tends to charge larger transaction fees than FRS debit processors
  3. By buying S&G, you would likely be transferring money back to someone's FRS account. Which may not be a problem, depending on what it is you want to achieve.
eatthebanksters's picture

Mixle, do you work for Jamie, Ben or Timmy?

mixle's picture

Doesn't everybody with a job?

If you think my response is unreasonable, biased, or factually wrong, feel free to point this out at any time.

tenaciousj's picture

His analysis is spot on.  I wouldn't keep a dime more in PayPal than I had too.

TobyJones's picture

Great idea except that Paypal is a little less trustworthy than would be ideal.  You have limited recource if they decide to freeze your account on a whim. Unfortunately that is where the "full faith and credit" thing comes into play. 

lead salad's picture

Better yet, pull out your dough and put it in a Credit Union.

cbxer55's picture

This mad hatter is like a broken record.

Paypal, paypal, paypal.

I have not seen one post of his lately where he does not mention paypal.


bugs_'s picture

Its tough to make predictions, especially about the future.

Double.Eagle.Gold's picture

I figure lots of predictions is best. People will forget the ones I get wrong and marvel over the rest.
Alan Cox

Sudden Debt's picture

That's why they invented TV Guides!

Ricky Bobby's picture

"What we don't know about the future is almost everything"

James Grant The Wall Street Journal, August 28, 1998

Shameful's picture

Isn't mass unemployment the "new normal"?

And this also assumes that there is not another move downward in employment.  Got to think that is likely if the Fed Gov ever thinks about austerity.  Now if it doesn't will just run the dollar into the gutter and will make exporting easier since we should be about wage comparable to Mexico.  Dollar death, employment solution?

SWRichmond's picture

Agree, the projections are based on dot gov deficit spending 10% of GDP, a factor which everyone (except DC) knows is unsustainable.  The dollar will be sacrificed on the altar of political expediency, maintenance of the status quo, etc etc.  Food, and anything with a significant energy component (PM mining!) goes up in price, for a long time into the future.

Ricky Bobby's picture

No No - CNBC ran a segment Hyping the growth in restaurant jobs. The service industry will save us. What was ratio of domestic workers in the UK around 1880,  I think it was around 25%. Wall Street just needs to make a push to hire more servants. Come on Jamie it is your duty to add to your personal staff. A third butler and two more gardeners.

cossack55's picture

When the dolar falls below parity with the Peso, can we then export US citizens to Mexico.  If so, will Mexico finish the border fence?

SayTabserb's picture

Thus, most realistically, this Depression will run at least as long as the last one. Depending on what you do with the War years, the first Depression went from 1929 to at least 1940. 96 months more of high unemployment would put this Depression on a par with its celebrated forerunner. Unemployment will almost certainly get worse as the pension crisis and state and local government squeezes really kick in. That will be another major turn down.  Yeah, we can be proud - this one will be a Depression for the Ages.

RobotTrader's picture

Jobs numbers seem to have no corrolation with the stock market.

If I recall, jobs numbers always continue to improve well after the stock market tops and jobs numbers are always bad until halfway through a bull phase in stocks.

The mad herds of Wildebeests are now chasing chart motion and nothing else.  So the best thing to do is follow the money and forget about the horrible economic stats.

Academia is now littered with corpses of PhD's who constantly write extensive, detailed theories of why and how the stock market and economy should be crashing.

To name a few:

- Nouriel Roubini

- Robert Shiller

- Robert "Shampoo" McHugh

- John Hussman

- Michael Panzer

Yet the "Age of Infinite Fiat" continues on, with repeated bouts of "Wash, Rinse, Repeat" cycles characterized by temporary busts, followed by even bigger booms and bubbles.

Everyman's picture


I understand your approach and theory in trading and investing.  I use your position as a barometer, as my view is very similar to yours, however I do not trade invest daily.

When do you think the market forces will actually take in to consideration actual daga, jobs numbers, soveriegn debt, defalults, etc.

I think a sexy Japanese woman post would make your point as well.

VegasBob's picture

Robot, I hope you sell all of your stocks the day before Bernokio announces that he is going to stop printing money.  That day will be the mother of all stock market crashes.

Sudden Debt's picture

stop printing?

They better hire extra maintenance crews for the printing presses so they can keep running 24/7 at 200%

Caviar Emptor's picture

Rumor has it Ben is installing a fission reactor in the basement in anticipation of further QE programs. Getting his enriched uranium rods from North Korea. 

Shameful's picture

He will stop the same way Gideon Gono stopped.  No one would accept the paper and the Chinese said "Enough is enough".  I expect the same here, so I would not hold my breath about him stopping before the dollar is slag.

eatthebanksters's picture

we shall live the nightmare of the Weimar...

Shameful's picture

Probably a lot worse.  At least in Wiemar they had local food production and distribution and were semi self sufficient.  America loses the dollar and it loses the ability to import all the goodies it's used to.  Feeding the mega cities will be rough with limited fuel reserves.  Even if the food is available moving it still takes energy.  Hell the whole American system is built on massive energy expenditure and massive energy imports.  So it's quite possible we will see people pawning their jewelry to buy food and fuel.

This is the thing that amuses me about the people that think the Fed would never all ow this.  Hyper inflation is a great wealth aggregator.  Even if the people have their debts cleared they do not make more money or wages lag and they must sell assets to maintain their lifestyles.  Also of note the big players carry massive debt so such an event would purge the bad debt from their books and leave them with performing assets.

papaswamp's picture

I agree equities have decoupled from main street. The relation of govt pump monkey money to the rise or fall of equities (or housing or auto sales, etc.) is quite obvious. Has there ever been such an amount of govt money pumped to keep the market alive? We are talking trillions upon trillions. We are in uncharted territory...eventually the govt will have to shut off the money flow t the false market. When that will crash....and it will crash because jobs will never reach the levels they were at before. Population growth exceeds jobs needed. This has been obvious for the last 10 yrs as not in labor force (NILF) has gone from ~70 million in 2000 (Nov) to now ~84 million. This increase occurred evn while the so called boom time of 2006....NILF has increased every year. We have a long term systemic problem.

Shameful's picture

Of course the economy has nothing to do with the stock market, with infinite fiat why would they?  I salute those brave enough to slug it out with the bots and the infinite fiat behind them.  I think no limit poker is a lot less nerve wracking and safer, but that's just me.  Godd luck out there!

Caviar Emptor's picture

Never forget it: if stocks were rigged to go up, you bet yer boots they're also rigged to go down. Through history this has happened many many times. All through 2008 there were shouts and screams about bear conspiracies. It's just a rigged casino and a zero-sum game. Someone has to lose if someone wins. When times are smooth like now, you can cruise in and  out and everything seems fine. When things get rough you get a shock when you find out how little money is bid for your worthless pieces of paper (IOUs essentially backed by nothing in the capital structure). 

cswjr's picture

I don't think that it's outside of the realm of possibility that we will NEVER reach the pre-depression level of employment, given our demographics.  The decline in LF participation will undoubtedly get reversed to some degree, but there is a large cohort that will never re-enter the job market -- they'll be dead, incapacitated, on the dole, or lack the qualifications for likely job openings.  Anyone over the age of 55 who is among the long-term unemployed will have serious trouble finding gainful employment.  A wave of immigration doesn't seem particularly likely, for various reasons, but you never know (potato famine, part deux?).


SWRichmond's picture

And the jobs that are "created" will not be the middle class-sustaining jobs we once had.  Gone.

mikla's picture

+1 to each of you.

There is no scenario by which these jobs will come back.  The Boomers are screwed -- many are done working for life, with the possible exception of Walmart Greeter or French Fry Guy.

Employment levels will not return before sovereign default of all Industrial nations, after which the Boomers may get a chance to work in the munitions factory "Testing" department.

On the bright side, the "new normal" implies lots more neighborhood block parties, potlucks, and available recreational time.

Shameful's picture

We can't say no scenario.  For example if somehow the US was able to destroy the worlds manufacturing base without taking any domestic hits we would not be that much worse off then post WW2.  Granted it's quite the pickle to leave the world a shelled out gutted husk, not get hurt, and then have the diplomatic skill to have them open their markets.  It's not impossible just exceptionally unlikely.  So there are situations out there, just they are outside the realm of possibility to all but the most demented RAND dreamer.  Hell there is probably a report out there talking about a preemptive nuclear strike on all economic/industrial centers on the globe to reestablish economic dominance.

Might be miss reading your words.  "block parties" = food riots?

mikla's picture

We can't say no scenario.  For example if somehow the US was able to destroy the worlds manufacturing base without taking any domestic hits we would not be that much worse off then post WW2.

True, and I also negated the possibility that, "space aliens land and give us their technology, ushering a new era of peace and prosperity".   ;-))

Typically, my "no scenario" assertions are three standard deviation assertions (i.e., at 99.7300204% confidence interval on a normal distribution, although I further concede these events are anything-but normal distributions).

For example, yes, I agree with your example that US prosperity would grow if manufacturing plants all over the world were destroyed, permitting the "untouched" US to rebuild its manufacturing sector, to supply worldwide demand.  (We agree that is why we had such a great "Happy Days" post WWII.)  However, even in that unlikely scenario, I don't see the Boomers prospering:  It would take 5-10 years to destroy world manufacturing, and then it would take time to re-build international demand post world war, and by then, the Boomers are pretty much "done".

But, at 65+ years old, I suppose they could work in the manufacturing plant cafeteria.


Shameful's picture

Oh come on!  You can't take space aliens off the table.  I'm sure that there have been talks in the halls of power about the hope aliens show up so that we can sell them bad debt and crash their civilization with our weapons of mass destruction :)  I can see it now Lloyd heading up Galactic Sachs and conquering Alpha Centauri!  Imagine the damage Larry "The Hutt" Summers could do to an unspoiled planet!

And I will totally agree there is no likely scenario to turn this around.  Sadly the only somewhat realistic, and still basically impossible scenario, is some egg head in the US figures out cheap, portable, cold fusion and decides he wants to keep the tech here for at least a few years.  The job and energy situation are both monstrous, and only something like this would save us.  But this is along the lines of space aliens handing it to us...

As to 5-10 years, I would disagree.  If the US could pull it off which is extremely unlikely it would have to happen in 1-3 months.  We don't have the depth or the reserves to take on the world that long without hyper inflation.  Damn foreign creditors!  So it seems to me it would be a full scale nuking...maybe the boomers would die in the fallout from the preemptive strike the US could use on it's creditors.

The boomers are screwed but I have 0 sympathy.  They decided to knuckle under and play in the system and trust it even as it sold them, and their children into slavery.  Now after they have benefit from the cheap foreign goods they are concerned about their pensions and retirements to be funded on their children backs.  Here is to hoping they have good personal relationships with their children, otherwise the world is a hard place.

Sisyphus's picture

I always wonder about this. Say, tomorrow, there is a great reset. Whoever survives, how easy/difficult will it be for them to start off from where the reset occured.

Shameful's picture

Depending on how bad it is we go all the way down to the bottom. Say there is a big solar emp that kills all the grids, then it's light out for generations maybe more. Our society is not well able to handle huge shocks. Happened in say 1910 no big deal, here would be all kinds of bad.

Personally not worried about it. And it's not something that can really be planned for on the personal level anyway other then have a few extra cans of beans and a gun.

My moneys on slower crisis. Food shortages, currency panics and energy shortages. All bad but the data should still be around.

RockyRacoon's picture

Those old folks (for whom you have zero sympathy) will have a much better chance of surviving an apocalyptic event.   I was a kid living in a house in a farm pasture, no running water, an outhouse, and my mother cooked everything on a wood stove which also heated the house.  Our vegetables came from our garden and those of our neighbors.  We drank fresh, raw milk and ate freshly baked bread.  I was not punished by being sent to my room because I didn't have a room but a corner of the main room with a small steel-frame bed.  Let's see who survives a "modern upheaval" the best.

Caviar Emptor's picture

You'd be right. What's not getting much press, understandably, is that this is a structural downsizing of the economy. Only now are a few talking heads saying this (even lately on CNBS!). 

It began as early as the 1970s and took several downturns as the manufacturing/industrial might of the United States got sold overseas. That trend is intact. For a while is looked possible that service jobs might replace those. Until the downturn of 2001-02: for the first time ever jobs growth in the ensuing recovery (03-07) did not replace the jobs lost in the prior recession. (!)

The charts show the trend: each subsequent recession since 1991 takes longer and longer to heal. The last one never fully healed before the next. These are cascading steps down. 

DisparityFlux's picture

The charts do not indicate when the BLS begins tracking extended unemployment as a career, and count the recipients as marginally employed.

Atomizer's picture

Joint External Debt Hub (JEDH) is back up

I haven't weeded thru the numbers today. Enjoy your discovery.

fuu's picture

I have a sort of soft spot in my heart for the Minneapolis Fed. Those guys will give you the pants out of their closet.

DavidRicardo's picture

There are spiders which, having demobilized their prey, keep it alive and feed it--all for the time, later, when they will devour it.


This is ZH's "economic pick up."


Ted Bundy--the serial killed--would give women a ride in his car.  Once they got in, they would notice that all the door and window handles had been removed.


This is ZH's "economic pick up."


Once Lee Harvey Oswald got out of the schoolbook depository, he expected a car to be nearby, waiting to take him to safety.  It wasn't there.


This is ZH's "economic pick up."


Once Christ died, he expected to be carried on angels' wings into heaven.  He wasn't.


This is ZH's "economic pick up."

Lndmvr's picture

Have to reply about angels. My first mother in law was shot in the head and left to die by the nazis in wwII along with hundreds of others in the ditch that day. Army picked out the live ones 3 days later. Through the years of her life she almost died 3 times more. She always spoke of the angel with the outreached hand coming form the sky each time just before she was brought back to life by others. She painted pictures for most of her life to try and deal with it. Hope it was real this last time when she went.

Caviar Emptor's picture

Great story. There are others who've experienced similar things.

Kayman's picture

China and the criminal banksters- the spider(s), asymmetrical jihad is the poison, and America is stuck immobilized on the spiders web.

Question ? How much of Corporate America's earnings are stuck off shore and will never return.

How much of current earnings are actually earnings from foreign sources- simply bookkeeping entries ? 

Money on the sidelines being really money in the ditch?


MichaelNY's picture

There's a first time for everything...