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bigcat1969 (93.78)

Almost 5 million unemployed over 6 months

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August 07, 2009 – Comments (7)

While the unemployment numbers are certainly good, there are some strange numbers if you dig a bit deeper into the report.  U6 was virtually unchanged and labor participation has dropped a touch.

The most frightening thing in the report is that long term unemployment of over six months jumped from 1.661 million one year ago to 4.934 million now. It was also up from 4.218 million last month. So almost 5 million people are reports to be unemployed and yet still looking for employment. This begs the question of how many people who have been unemployed over 6 months are discouraged and not seeking a job and so are not included in the report.

Even more frightening is the employment to population ratio which has dropped from 62.8 to 59.8 in the past year. This trend is virtually assured to continue even if the economy improves as baby boomers retire. Fifty percent is likely a magical number that will be reached in five years or so. The number ten years ago was 64.9, so in fifteen years we are likely to have fallen from almost 2/3rds of the population employed to half. This will have a significant effect on the country, since much of this shift is from employment to social security.Combine this with a blossoming national debt and there might be a future issue.  In fact it might even come up in the Presidents second term.  It will be interesting to see how he deals with the fallout from the bailout.

7 Comments – Post Your Own

#1) On August 07, 2009 at 11:35 AM, LifeForceDance (56.73) wrote:

It is no mystery that the market has gone up by twenty percent after going down fifty percent.  There is much more to come on the upside.

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#2) On August 07, 2009 at 11:46 AM, bigcat1969 (93.78) wrote:

I've been studying the charts some more and found an interesting longterm note.  The unemployment rate of males 20 and over has gone from 3.4% in July of 1999 to 9.4% in July of 2009.  To be fair it does vary in cycles hitting 5.2% in July 2003 before settling to about 4% in the July figures from 2005-07 and then rising to 5.2% and 9.4% the last two years.

Another interesting note is that in the good times the July compared to December rate change is anywhere from flat to up half a percent.  While in tougher times it seems to jump much more.  The jump last year was from 5.2 to 7.6% which was extreme.  If we stay under 10% in December it might well mean that the job market has stabilized, while if we hit 11% or more it is likely a sign of more pain to come.  Of course six months is a long time to wait.

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#3) On August 07, 2009 at 11:54 AM, SolarisKing (< 20) wrote:

Hogwash.

If i was running a company right now (which i am) the first thing i would do is cut non performing/unessential personnel. 

ONCE I HAD DONE THAT IT WOULD BE NEAR IMPOSSIBLE TO CUT ANY MORE PERSONNEL. Therefore my 'increase in new jobless' would stall, at least temporarily. NOT BECAUSE I WAS SUDDENLY MAKING A WINDFALL (which i'm not) but because i can't lose a single other employee without COLLAPSING. I am still in bankruptcy (also in RL), and near forclosure, i just CANNOT lose a single other worker.
    If the spending doesn't increase (my revenue i mean) i will go under, losing a 35 year old organic farm. The stall (for me) is not a indicator that i am doing well, just that THERE IS NO MORE TO CUT.
   I sell in Telluride. My customers include Woody Harrelson, Darryl Hannah, and Joe Cocker, among other notables, but even though most of my customer base is rich, the rest of my customer base is declining, while the market continues to tighten. If i sell to rich folks, i don't know how other farmers are making it.

   In conjunction, all my current employees are my highest paid ones. Inherently the average wage has gone up, and so has the number of hours.

    Any of you who lives in the real world will see this crystal clear. If I l cut two more emplyees, it's because i'm BK.

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#4) On August 07, 2009 at 12:00 PM, OneLegged (< 20) wrote:

SK, sorry to hear that.  My business is dead in the water.  No employees and little to no work.  Keep pluggin'!  At least you're still afloat.

 

I'm in Colorado as well. 

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#5) On August 07, 2009 at 12:04 PM, bigcat1969 (93.78) wrote:

Ouch SK, I hope you make it!  That is an interesting post as I hadn't thought of the fact that cutting nonessential workers would tend to drive up both average wage and hours for those left.

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#6) On August 07, 2009 at 12:14 PM, russiangambit (29.43) wrote:

Solaris, you need to post it as a separate blog. It provides great insight into what is going on.

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#7) On August 07, 2009 at 7:19 PM, bigcat1969 (93.78) wrote:

Just a note that Solaris did post a an interesting blog that is generating lots of discussion so check it out.

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