Home › Forums › Financial Markets/Economics › What are the real unemployment numbers?
- This topic has 200 replies, 22 voices, and was last updated 14 years, 4 months ago by Werewolf.
-
AuthorPosts
-
December 5, 2008 at 10:16 PM #312636December 6, 2008 at 3:02 PM #312294EconProfParticipant
Imagine it. Actually the news today was that some 440,000 people moved from unemployed status to “discouraged worker” status, meaning they were no longer looking for work but would take it if offered. (Look again at the carefully crafted questions asked in the Household Survey).
The BLS tracks #s of “Discouraged Workers”, “Underemployed”, and also “Long Term Unemployed” (more than x weeks unemployed), what we used to call hard core unemployed.
Remember that the # of “Unemployed” is actually a stock–a sum measured at one point in time. It is the result of two flows–the # of people moving into unemployment status each month less the # of people leaving unemployment status (got hired or else stopped looking, i.e. discouraged worker), plus the # of people remaining in that stock from the previous month.
It is not inconceivable that 440,000 people left the pool of 10,250,000 unemployed pool and gave up looking for a job last month.
Now, what would our unemployment rate be if we hadn’t seen those 440,000 drop out? It would have gone up to 7% from 6.5%, not the reported 6.7%. Add to this revisions DOWNWARD in the previous two months’ payroll figures and you have a really catastrophic jobs picture right now. The official figures actually understate the deterioration unless properly interpreted.December 6, 2008 at 3:02 PM #312650EconProfParticipantImagine it. Actually the news today was that some 440,000 people moved from unemployed status to “discouraged worker” status, meaning they were no longer looking for work but would take it if offered. (Look again at the carefully crafted questions asked in the Household Survey).
The BLS tracks #s of “Discouraged Workers”, “Underemployed”, and also “Long Term Unemployed” (more than x weeks unemployed), what we used to call hard core unemployed.
Remember that the # of “Unemployed” is actually a stock–a sum measured at one point in time. It is the result of two flows–the # of people moving into unemployment status each month less the # of people leaving unemployment status (got hired or else stopped looking, i.e. discouraged worker), plus the # of people remaining in that stock from the previous month.
It is not inconceivable that 440,000 people left the pool of 10,250,000 unemployed pool and gave up looking for a job last month.
Now, what would our unemployment rate be if we hadn’t seen those 440,000 drop out? It would have gone up to 7% from 6.5%, not the reported 6.7%. Add to this revisions DOWNWARD in the previous two months’ payroll figures and you have a really catastrophic jobs picture right now. The official figures actually understate the deterioration unless properly interpreted.December 6, 2008 at 3:02 PM #312682EconProfParticipantImagine it. Actually the news today was that some 440,000 people moved from unemployed status to “discouraged worker” status, meaning they were no longer looking for work but would take it if offered. (Look again at the carefully crafted questions asked in the Household Survey).
The BLS tracks #s of “Discouraged Workers”, “Underemployed”, and also “Long Term Unemployed” (more than x weeks unemployed), what we used to call hard core unemployed.
Remember that the # of “Unemployed” is actually a stock–a sum measured at one point in time. It is the result of two flows–the # of people moving into unemployment status each month less the # of people leaving unemployment status (got hired or else stopped looking, i.e. discouraged worker), plus the # of people remaining in that stock from the previous month.
It is not inconceivable that 440,000 people left the pool of 10,250,000 unemployed pool and gave up looking for a job last month.
Now, what would our unemployment rate be if we hadn’t seen those 440,000 drop out? It would have gone up to 7% from 6.5%, not the reported 6.7%. Add to this revisions DOWNWARD in the previous two months’ payroll figures and you have a really catastrophic jobs picture right now. The official figures actually understate the deterioration unless properly interpreted.December 6, 2008 at 3:02 PM #312704EconProfParticipantImagine it. Actually the news today was that some 440,000 people moved from unemployed status to “discouraged worker” status, meaning they were no longer looking for work but would take it if offered. (Look again at the carefully crafted questions asked in the Household Survey).
The BLS tracks #s of “Discouraged Workers”, “Underemployed”, and also “Long Term Unemployed” (more than x weeks unemployed), what we used to call hard core unemployed.
Remember that the # of “Unemployed” is actually a stock–a sum measured at one point in time. It is the result of two flows–the # of people moving into unemployment status each month less the # of people leaving unemployment status (got hired or else stopped looking, i.e. discouraged worker), plus the # of people remaining in that stock from the previous month.
It is not inconceivable that 440,000 people left the pool of 10,250,000 unemployed pool and gave up looking for a job last month.
Now, what would our unemployment rate be if we hadn’t seen those 440,000 drop out? It would have gone up to 7% from 6.5%, not the reported 6.7%. Add to this revisions DOWNWARD in the previous two months’ payroll figures and you have a really catastrophic jobs picture right now. The official figures actually understate the deterioration unless properly interpreted.December 6, 2008 at 3:02 PM #312772EconProfParticipantImagine it. Actually the news today was that some 440,000 people moved from unemployed status to “discouraged worker” status, meaning they were no longer looking for work but would take it if offered. (Look again at the carefully crafted questions asked in the Household Survey).
The BLS tracks #s of “Discouraged Workers”, “Underemployed”, and also “Long Term Unemployed” (more than x weeks unemployed), what we used to call hard core unemployed.
Remember that the # of “Unemployed” is actually a stock–a sum measured at one point in time. It is the result of two flows–the # of people moving into unemployment status each month less the # of people leaving unemployment status (got hired or else stopped looking, i.e. discouraged worker), plus the # of people remaining in that stock from the previous month.
It is not inconceivable that 440,000 people left the pool of 10,250,000 unemployed pool and gave up looking for a job last month.
Now, what would our unemployment rate be if we hadn’t seen those 440,000 drop out? It would have gone up to 7% from 6.5%, not the reported 6.7%. Add to this revisions DOWNWARD in the previous two months’ payroll figures and you have a really catastrophic jobs picture right now. The official figures actually understate the deterioration unless properly interpreted.December 6, 2008 at 6:06 PM #312349socratttParticipantSo essentially what I am saying above is correct. There are plenty of unemployed in this country that just aren’t accounted for because their monthly checks have stopped and they aren’t technically part of the unemployment calculation.
I think the government is smart to keep these numbers down, so that we don’t panic, but knowing this system is far from fool proof puts these numbers into perspective.
December 6, 2008 at 6:06 PM #312705socratttParticipantSo essentially what I am saying above is correct. There are plenty of unemployed in this country that just aren’t accounted for because their monthly checks have stopped and they aren’t technically part of the unemployment calculation.
I think the government is smart to keep these numbers down, so that we don’t panic, but knowing this system is far from fool proof puts these numbers into perspective.
December 6, 2008 at 6:06 PM #312736socratttParticipantSo essentially what I am saying above is correct. There are plenty of unemployed in this country that just aren’t accounted for because their monthly checks have stopped and they aren’t technically part of the unemployment calculation.
I think the government is smart to keep these numbers down, so that we don’t panic, but knowing this system is far from fool proof puts these numbers into perspective.
December 6, 2008 at 6:06 PM #312758socratttParticipantSo essentially what I am saying above is correct. There are plenty of unemployed in this country that just aren’t accounted for because their monthly checks have stopped and they aren’t technically part of the unemployment calculation.
I think the government is smart to keep these numbers down, so that we don’t panic, but knowing this system is far from fool proof puts these numbers into perspective.
December 6, 2008 at 6:06 PM #312826socratttParticipantSo essentially what I am saying above is correct. There are plenty of unemployed in this country that just aren’t accounted for because their monthly checks have stopped and they aren’t technically part of the unemployment calculation.
I think the government is smart to keep these numbers down, so that we don’t panic, but knowing this system is far from fool proof puts these numbers into perspective.
December 7, 2008 at 9:05 AM #312488blahblahblahParticipantesmith brings up some good points. Both of my parents fall into the “under 65 and employable” catagory, yet neither works anymore. They left today to go run a marathon, so they arnt in the unemployable catagory yet they inflate your stats as they dont have jobs. They saved and invested and worked hard and now are enjoying a long retiremnet for it. They should not be counted as “unemployed”.
They won’t be counted. The unemployment calculation works like this:
% Unemployed = % of population currently receiving unemployment benefits
Since unemployment benefits run out after a few months (varies by state), the number doesn’t reflect those who never found a job before their benefits ran out.
December 7, 2008 at 9:05 AM #312845blahblahblahParticipantesmith brings up some good points. Both of my parents fall into the “under 65 and employable” catagory, yet neither works anymore. They left today to go run a marathon, so they arnt in the unemployable catagory yet they inflate your stats as they dont have jobs. They saved and invested and worked hard and now are enjoying a long retiremnet for it. They should not be counted as “unemployed”.
They won’t be counted. The unemployment calculation works like this:
% Unemployed = % of population currently receiving unemployment benefits
Since unemployment benefits run out after a few months (varies by state), the number doesn’t reflect those who never found a job before their benefits ran out.
December 7, 2008 at 9:05 AM #312876blahblahblahParticipantesmith brings up some good points. Both of my parents fall into the “under 65 and employable” catagory, yet neither works anymore. They left today to go run a marathon, so they arnt in the unemployable catagory yet they inflate your stats as they dont have jobs. They saved and invested and worked hard and now are enjoying a long retiremnet for it. They should not be counted as “unemployed”.
They won’t be counted. The unemployment calculation works like this:
% Unemployed = % of population currently receiving unemployment benefits
Since unemployment benefits run out after a few months (varies by state), the number doesn’t reflect those who never found a job before their benefits ran out.
December 7, 2008 at 9:05 AM #312899blahblahblahParticipantesmith brings up some good points. Both of my parents fall into the “under 65 and employable” catagory, yet neither works anymore. They left today to go run a marathon, so they arnt in the unemployable catagory yet they inflate your stats as they dont have jobs. They saved and invested and worked hard and now are enjoying a long retiremnet for it. They should not be counted as “unemployed”.
They won’t be counted. The unemployment calculation works like this:
% Unemployed = % of population currently receiving unemployment benefits
Since unemployment benefits run out after a few months (varies by state), the number doesn’t reflect those who never found a job before their benefits ran out.
-
AuthorPosts
- You must be logged in to reply to this topic.