This page has been archived and commenting is disabled.
Real U-3 Unemployment Rate When Adjusted For Labor Force Participation: Around 14%
When it comes to pointless (and bullish) reversion to the mean exercises,it seems nobody has a problem with saying stocks have to go back to 1,500 just because that's where they were, and the unemployment rate has to go back to 5% cause that's how we know the Fed is the immaculate and flawless piece of art it is, and always gets things under control to near-peak efficiency. Well, here at Zero Hedge we (again) decided to take the reversion to the mean approach and flip it, instead applying it to a deteriorating indicator, the labor force participation rate. The first chart below demonstrates the LFP rate, which a derivative of the chart we presented earlier, has now plunged to the lowest level in over 25 years, or 64.6% (gotta go back to December 1984 for the first time this was passed). So we decided to "normalize" the LFP by keeping it at the peak achieved at the turn of millennium, or December 1999, when it hit a peak of 67.1%. Now as everyone knows the US population has been soaring since then, and with the cost of living increasing ever more with each day, and as more and more family members are forced to join the work pool, it makes sense that in a normal economy, the LFP should continue rising instead of declining. We thus kept it constant at the 67.1% level (instead of doing the conservative thing and pushing it higher along the trendline), and ran the unemployment numbers through, assuming this part of the jobless equation was constant. To our surprise, we found that the U-3 rate (not the U-6), which today was supposed to be 9.5%, in fact turns out to be 13.0% as of July: an all time record save for the 13.6% recorded in December 2009. And if instead we use the trendline number of a 68.5% LFP rate, the unemployment rate today would be 14.7%. In retrospect we sympathize with Christina Romer's decision to get the hell out of Dodge.
Reported and adjusted labor force participation rate:
Running these numbers through the actual unemplyment calculation, reveals the following: while assuming a declining LFP rate we obviously get the 9.5% unemployment rate, assuming a peak 67.1% LFP results in a 13.0% unemployment rate. And if the labor force participation rate were to grow according to trendline, the jobless rate in the US today would have been reported at 14.7%, just about where the U-6 was reported, but based on an entirely different methodology.
»
- 11808 reads
- Printer-friendly version
- Send to friend
- advertisements -
Won't matter, I bet we close down a tad today. Then some great news Sunday night, and presto the index futures gap open, then float higher all night long. We all wake up Monday morning with CNBC telling anyone who will listen the stock index futures are up up up and away. We gap SPY open rise a little more the trade sideways all week long.
Yes folks it's that easy.
I hate to say it but it's almost like you dump on Friday night, buy Monday AM, watch the taxpayer funded ramp up, and sell on Mon PM.
Or better yet - hold long over the weekend to take advantage of the gap up.
Did you have to say that ?
Tell it, brother! All the big moves happen after hours on zero volume.
Ah, yes. The markets got their weekly goosing starting at 2:476 PM EDT today. RSI(14) was in positive territory without a single negative excursion from 2:18 on. Nope, no cause for suspicion there... a truly outstanding surge. And totally legit!
This market wil not be 'allowed' to close beneath the 200 day. Complete farce.
when governments have to manipulate the markets so aggressively... FEAR must be running rampant about collapse. As long as the market is going up, people feel good...think things are getting better... will hire people to expand...blah blah blah. However, James Kunstler is quite right about his "long emergency" causing economic contraction.
The ramp job hurts the common man who sees the gas prices spiking at the pump. Oil over 80 dollars in the GREATEST RECESSION should be the biggest clue to everyone that we are at a pivotal time in our civilization.
As I see it, there are only two ways out of this:
1. Technological advancement in alternative energy that can permanently replace oil economically.
or
2. We revert back to a pre-industrial society without cheap energy bringing us food/electronics/etc.. from thousands of miles away.
+ 1
There are already lots of ways to displace oil in transportation. And we don't need to get rid of it; we just need to reduce marginal use. The average American family has 2.5 cars, and the average American commute is less than 40 miles, which is well within the range of the Chevy Volt, and of course, easily done with any of the hybrids available. There's no reason most American families couldn't have one electric/hybrid, and one conventional car; that alone would reduce North American demand so that it could easily be supplied by Canada, the US, and Mexico. Screw the Middle East.
But, so long as a significant number of American men believe that the size of their car and its engine are a proxy for the size of their penis, it ain't gonna happen.
So, to solve the energy crisis, the US government should invest heavily in effective penis enlargement techniques. You read it here first.
If 10,000 volt's try to recharge overnight in Wash DC, how many additional gas/coal/nuclear power plants will be required?
Exactly...now multiply by every city in America.
Maybe they can throw in the soon to be patented O-Tire Gauge by Acme as well for an additional one percent projected savings...ROTFL.
Our best and brightest are on the case.
Whoa there, Skippy!
First of all, my penis NEEDS to be transported from place to place at high speed via my Inferno Red Charger RT - the one with the HEMI... traditional rear wheel drive.
Now I don't know about your penis, but mine simply won't fit in a Chevy Volt!
Second of all... you DO realize that the Chevy Volt and other electric cars aren't powered by lightening bolts striking the key attached to the kite attached to the Volt's antenna... right?
Ya see, Skippy... electricty (the plug in type!) comes from...
(*SNORT*)
Oh... nevermind.
In any case, Skippy... RESPECT THE PENIS... RESPECT the American Muscle Car!
BILL
+1
lol, so true
Farce or not, it went up. Somebody is buy. Don't fight the tape.
Somebody named Ben and Timmy?
Good data means everything is all right, so buy. Bad data means more money will be funnelled to the brokers and banks and on to any and all stocks, so buy. The circle remains unbroken, and this can be kept up for a very long time. There is no risk; taxpayers will pay for anything and everything.
Makes it the perfect system - provided you are in good with the Ruling Class and don't mind selling your soul.
What taxpayer?
Will the circle be unbroken
By and by, by and by?
In a better home awaiting
In the sky, in the sky?
How DARE you do something so technically logical!!!!
I agree. Just as truth is the enemy of a lie, logic is the enemy of spin.
Logic unravels the lie to establish the truth...
"logic is the enemy of spin"
In this brave, new world, spin is the new logic. Just ask the folks at CNBC and the WSJ.
MCD about to make all time highs as Senate approves cut in food stamp program...
Meanwhile Michelle shows how Housewives of DC party when the little people pick up the tab...
With the departures of Orzag and Romer, that leaves Tim Geithner as the sole person in charge of nudging Larry Summers as he dozes off during staff meetings.
I think Romer quit because she felt left out. PPT is pud pulling team and alas she has no pud. Orzag's wife got tired of him practicing at home and made him quit. So just little Tim and his little pud and old senile Larry who often mistakes his nose for his pud. Could be some volatility until they get some new jerks in the circle.
LOL! Poor Timmy.
"With the departures of Orzag and Romer..."
That picture with the X'd out Romer and Orzag yesterday was HILARIOUS...
Did you notice? Timmay's mom had his suit perfectly pressed... Fat Larry's suit looked like he fell asleep on the oval office rug in it...
With his pie gut hanging out the bottom...
The "Brilliant" Fat Larry Summers...
did the PPT got fired?
No. Looks like they are bringing things up rather nicely. Slow and orderly recovery off the lows. Don't want to arouse any suspicions.
Tyler.. You are hardly being fair. Those unable to be counted as unemployed are happy to not have an income and be banished from the statistics.
Bastards!.. I wish they would get a job and quit sucking.. Ohhh wait.. that's right.. mmm
Our government learned a few lessons from Stalin.
"It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything."
Joseph Stalin
We've taken Stalin's lesson about vote counting and applied it to unemployment numbers.
From Yahoo Finance. LOL
Market Update Set AlertADVERTISEMENT
3:00 pm : Stocks have started to gap higher as they enter the final hour of trade. The move comes after more than three hours of sideways trade and without any clear catalyst or news item. Nonetheless, stocks have almost halved their losses and are back near the levels where they started the session
I saw that & exclaimed "what the fuck?!" - but then I remembered that we have been transported to the magical land of skittles shitting unicorns, and realized that all is as it should be
now is about that time when TD posts his infamous Volume Distribution chart...volume down, market up
and what about this surprises you??
Everyday it's the same thing. The market goes higher and then comes the same surprised reaction along with phycadellic drawings produced by Adobe Photoshop known as charts to verify just how fucked up the market is. It reminds me of my dogs reaction every time I leave the room for a second and then return. He barks like it's the first its time he's ever saw me.
Easy to please dog, easy to please population.
Who in their right mind would question a rising market when it's still down 25% from the highs and all those 401(k)'s aren't back to where they need to be if you or I are going to retire. Since they must reduce the overhang of employed old farts like you and me to make way for the underemployed young uns, they need to set out the bait to entice us into our rocking chairs. Then watch out below.
Whoops, was that my out-loud voice?
For many animals, there seems to be no tomorrow, only now. Yesterday is rolled into friend, threat or food.
Come to think of it, I guess man is a animal.
And so the normalization of the insane and absurd is just about complete.
"Oh look, the market bounced back up on no news after terrible news took it down. Seems natural enough to me. What's on TV tonight honey?"
Back at the top of the hour Santelli said:
"It's just like any other day since March of last year". I got all excited that he was going to tell it like it is and set the world straight regarding the PPT etc. Instead, he followed with "Even though companies aren't hiring, they're making good money so investors keep buying them". Something to that effect. He then sucked up and wished Liesman a great weekend.
Sounds like the only honest reporter left on CNBS has gotten his shock treatment/lobotomy for the day and has decided to play it safe.
Turd,
We can't peg all our hopes on Santelli breaking through the national media blockade on his own. Nor can we condemn Santelli when he decides he wishes to remain employed over the weekend.
What are we doing to break through?
I hear ya, CD, and I've tried.
The Turd has had the pleasure of gracing the airwaves of CNBS on 4 different occasions, the last of which was this past February. Three of the segments were simply contrived bullshit. They tell you to prepare to discuss certain topics and then head off in completely different directions. If you really speak your mind, they move on to the other guest or simply cut the segment short. I once mentioned precious metals to B-cups Burnett and got the obligatory head shake and eye roll.
I did have one positive experience, however. I once got about three minutes alone with the lovely and gracious Mandy. Unquestionably the highlight of my television career. Hard (pun intended) to concentrate through that accent and cleavage. She finally stopped calling me in March which is good because my wife was getting pissed. ;)
At any rate, they haven't asked me back in a while. Go figure.
"At any rate, they haven't asked me back in a while. Go figure."
There's always TechTicker on Yahoo....
Better yet, without all the seasonal reductions to the overall labor force (if the total labor force used was simply the same number the BLS used 90 days ago!), the headline number would be 10.5% and Leisman et al would have the impossible task of applying a positive spin.
BTW, has anyone else noticed that the VIX has come all the way back down to unch?
Turd, is that how you spell Lies, man? I guess I have it wrong :-)
In my haste, I fucked that up. As everyone knows, its LIESman.
Just like Maria Headiromo.
See, now I heard it was spelled Fartiscamo
Fartisheadicamo.
Yep, 3:22pm EDT on a nice Friday and here comes the PPT. The magical market is now only down 65 on all today's super good news
Relax everyone, that 4 hour sidways action from 10am to 2pm was to load up now we go higher.
the bulls own Monday, until they don't. That long candlestick shadow on the lower end today begs to be filled. Mr Marquet needs a breather, we'll talk more back at 10000, but if you follow the rally through early 2009 you notice the volume stopped about 8500. So that's where we could go. Also check the Vix and see what you think, I think a cupping pattern and we are the bottom. If all those double leveraged day traders close their positions this afternoon, then the market can go lower Monday.
http://i38.tinypic.com/13z0qv5.jpg
TA is the real problem here. They are looking exactly at what you are so they know what targets to shoot for to cause sudden movement upwards and fast covering by shorts.
Just for the hell of it, ZH and a few other sites should give out false TA and then check the chart action when the PPT moves. They'll take some shit, but if they show what they are doing ex-post-facto, and the PPT reacts accordingly, that's proof positive of when they time their buys. Then find out who bought at the inflection points and you have a hell of a story. No mainstream site will do it, but us perma-bears don't look there and neither does the PPT. It would also be interesting to see the dns records of who visited the site when and superimpose those visits over the master chart that has the TA, stock Movement and now the site visit. Even better is do it dynamically with a little javascipt/ajax and PHP. Ahh Liberty 33 at 2.20pm, JPM at 2.35pm, S&P buys at 2:36 pm and index moves .20 for the next ten minutes following.
Not that any congress people would understand or even care if they did understand it, but that sure would pour some cement into the market gears as people who didn't believe see it for their own eyes and either Play with Ben or don't play at all. If the market has become meaningless but still can generate income, why not push it up and take money out? Then when everyone decides to dive in and we have a NASDAQ like move where the index’s double in a year, we get a super great short set up as Ben raise interest rates when inflation goes into overdrive.
Need to get the taxicab drivers talking at a prearranged time.
Just an idea.
Ps, ZH would have to beg borrow a geo-locater for IP addresses so for those with no domains we could still get them down to a city block.
"ZH would have to beg borrow a geo-locater for IP addresses so for those with no domains we could still get them down to a city block."
That's funny. Good luck with that one, cowboy. Sure, you might get lucky. But not if they didn't want you too.
It's like magic! Just look at the rise, zoom up, then zoom down, sideways then repeat.
Word. Thanks for keeping it real - real simple.
+ a butt load of money. :-)
Did anyone really think we would close down 100 points on the Dow hahaha that so funny. That won't happen till after the November election. See you Monday for the big gap open wheeeeeeeeeeeeeeeeee.
I know this is all tongue in cheek, but calling a rising LFP 'normal' is getting stuck between a few layers of charade economic reporting. In a 'normal' economy, the cost of living would be decreasing, or maybe fluctuating around level...not increasing. It seems like a more honest way to determine LFP is to count the number of people able to work--say between 18 and 65--and use that as the denominator. (Also note that the boomer curve is exiting that range, so that denominator may be either holding steady or decreasing.)
This is not to say that U-3 is not being underreported...I think shadowstats.com demonstrates that it is, chronically. Also it's a shameful fraud that people who are unemployed long enough are simply no longer counted.
It's getting to be that time on Friday where all the shorts race to cover because the market isn't going down.
Correct Hansel, all it takes is a little nudge. Short after the November election.
Nov elections wont happen, theyll look at the polls and see the carnage awaiting them and do a diversion instead. A few nukes in major US cities should do nicely.
"A few nukes in major US cities should do nicely"
It would only take one to fix the problem - DC?
None of this matters, just keep telling the public things are getting better, we are saving jobs. Just keep saying it, soon they will beleive it.
Also known as:
Management
Of
Perspective
Economics.
Add to the 14.7% all the self-employed (and no longer employed) in the construction, marketing, advertising, etc. industries and you'll arrive at my belief (IMHO) that the "true" number is somewhere close to 30%. As I recall, the number during the Great Depression was about 25%, making this the "Greater Depression".
well, the unemployed mustof all gotten work because the markets are climbing..
go friggin figure..
Just suckin a few more bulls in for the deep fry festival next week.
Hey - green shoots: Bank of America (BAC) discloses in a regulatory filing that it had positive revenue in 81% of trading days in Q3
What a great country!
LOL I think they are taking this great unemployment news and turning the market green. What a rampjob.
As long as there is rampant disbelief among pro's about this uptrend, such as calling rallies "ramps", the uptrend will continue.
Once they're referred to as rallies again, then it will reverse lower.
Market counter-psychology 101.
Works well until what? Everyone's un-employed?! Go long on rope.
Employment is overrated. I look forward to the day when the entire US economy consists of 6 algos generating trillions a year. The proceeds are taxed at a 99.99% rate, leaving the 6 algos' owners the richest people on the planet by far, while the proceeds are distributed to the rest of the US population to use in purchasing Chinese products.
Chinest invest their profits in markets ruled by algos (may the circle be unbroken), and no Americans need to be bothered with boring jobs. We can finally spend our time doing what's truly important.
Right, just like in the Jetsons. Algos, bots - let them do all the fucking work.
Work IS highly overrated. That's why God created the combustion engine, the wheel, the printing press, the loom, the computer, the sex doll, etc.
"and no Americans need to be bothered with boring jobs. We can finally spend our time doing what's truly important."
Watching American Idol?
Fucking, silly.
This country deserves to be destroyed, no one will do anything to stop these maniacs. Saw a video where a bunch of 'men' stood around watching some filthy mexicans stomping all over a flag. In fact I think americans like getting fuked in the ass all day, they love it.
All this bullshit reverse-meltdown makes me want to do is buy even more gold and silver. This load of fucking manipulated crap won't continue forever, and someone will be left holding the bag. All I can do is make sure it isn't me.
Yes.
The market must have picked up on this news.
http://washingtonindependent.com/93795/the-return-of-the-1000-down-mortgage
"The Return of the $1,000 Down Mortgage - Fannie Mae and State Housing Agencies Are Offering Little-Money-Down Mortgages."Yeah, great news for the robber barons of Wall St, as it'll lead to more outrageous mortgage arrangement fees, on the back of the us taxpaye^H^H^H^H^H^H^H^H ah who are we kidding, the money will be printed.
The biggest fraud in history, and no-one's gone to jail for it. Doesn't that paint a picture for you already?
Buy gold and silver, because those frauds in charge don't give a shit about the population.
Ugh, this is disgusting.
Down a tad indeed, hahahaha.....sellofffffff what selofffff. Have a great weekend, see you Monday for the big gap up on the open, remember just keep buying the dips, it's all rigged to the upside till the election.....GET YOUR FREE MONEY $$$$$$$$$$$$$$$$
@wiskeyrunner
Have a drink on me - you deserve it!
http://www.youtube.com/watch?v=ayF1T_CdGro
Or this
http://www.youtube.com/watch?v=p6q9nBusrq8
Hmmm is gloating allowed?? I know what usually happens just after it ......
I'll take the other side of that "guess" The elections are not going to make any difference, and we are considerably lower by election time.
Mainly because thats all I hear, and if it is that much out there, the market will take it the other way.
It's 4PM. Do you know where your charts are?
i guess employees just get in the way of profits .....
Not far off the mark. First World employees (that are honestly declared, securely employed) get in the way. They're too hard to corrupt versus other countries.
Third World hellholes don't have that problem. They can make it so that critics die, and the multinationals can do whatever they wanted to do in the first place. Third World slavery is profitable, giving a damn is not.
Irishscott2 (Tim) put together a little population/employment analysis:
Civilian Population has gone up 11.9% since 2000
Civilian Labor Force has gone up 8.0% since 2000, 3.9% LESS than the
population growth rate
Employed has gone up 1.8% since 2000, 10.1% LESS than the population
growth rate Unemployed has gone up 151.1% since 2000 - enough said
Not in the Labor force has gone up 19.9% since 2000, 8% MORE than the
population growth rate
NILF Want A Job Now has gone up 38.2% since 2000, 26.3% MORE than the
population growth rate
Looking at factoring ALL the numbers in line with the population
growth rate, we have lost basically 19,542,837 jobs since 2000 on the
basis of that rate vs. what has actually happened. The VAST majority
of that loss has happened in the past two years:
Instead of the average annual growth rate for the Civilian Labor Force
of 1,688,490 to be in line with the population growth, we have lost
1,030,000 in the past two years, for a net drop of 4,406,980 of the
total over loss from 2000 of 5,574,230.
Instead of the average annual growth rate for the Unemployed of 71,462
to be in line with the population growth, we have a gained 5,589,889
in the past two years, for a net growth over the expected of 5,446,965
of the total over growth from 2000 of 8,394,377.
Instead of the average annual growth rate for those Not In the Labor
Force of 816,577 to be in line with the population growth, we have
gained 3,752,094 in the past two years, for a net growth over the
expected of 2,118,940 of the total over growth from 2000 of 5,574,230.
What's really scary is if they start to really think about the models they use to "create" these numbers - and then decide that the "death rate" part of the equation must exponentially increase to make the numbers "pretty".
Econ 101:
-- 99ers are non-statistics
-- Unemployment is what we say it is
-- There is no such thing as a Balance Sheet Recession when we say there isn't
Everybody gets a special grade.