Unemployment rate 10.2%

http://www.marketwatch.com/story/unemployment-rate-hits-102-in-october-2009-11-06-83100

by kp212 • 17 years ago

32 31 17 years ago

jamesbressi2• 17 years ago

No one get upset over the problematic math behind the unemployment rate.

Even when I took economics in university and we got on this topic, our professor said that it is a very flawed number for such a numerous amount of reasons, but until the government adopts a better way of substantiating, view it as nothing more than a number that may or may not help you gauge the economic climate.

In other words, there is some benefit in understanding our situation with this surveyed number, but you should always question it and the media and government will use it how they please for their own agendas.

The debate on the unemployment rate is very interesting; Google it if you have time and read up.

jeromec• 17 years ago

It's still a useful number as long as it's measured consistently. It may not be a verbatim reflection of worker to full employment, for example, since it doesn't count "under employed" or the people that want to work more hours, but can't. However, if we know that the 10% it represents is more than triple what we might consider normal then it can be a telling gauge.

RyanMcGreal2• 17 years ago

There's still a problem: when the unemployment rate starts to fall six months or a year after it spikes, that in itself tells you nothing about whether people are exiting unemployment because they've found jobs or because they've given up looking.

stumm• 17 years ago

If you include discouraged workers (ie. people who aren't looking for work) the rate is actually 17.5%. http://www.bls.gov/news.release/empsit.t12.htm

btilly2• 17 years ago

It's still a useful number as long as it's measured consistently.

Unfortunately it is not measured consistently over long periods of time.

yummyfajitas2• 17 years ago

It's very true that the time series Unemployment does not count involuntary part time workers. However, the time series Involuntary Part Time Workers does count people who want to work more hours but can't.

The BLS tracks both these numbers.

http://www.bls.gov/news.release/empsit.t05.htm

I think half the criticism of the unemployment number is simply because people wish one number could explain everything, but unemployment does not.

RyanMcGreal2• 17 years ago

Judging unemployment via the unemployment rate is a bit like judging your website's popularity via Alexa. The question becomes: is lousy data better or worse than no data?

fnid3• 17 years ago

It's not no data. There are lots of data points to use, it's the choice of exactly which data points to use that is in question. The same debate rages over inflation as well.

The issue is who is and who isn't included in the definition of unemployed. The truth is, if you don't have a job and you need one, but you've given up your search, you're still unemployed.

sireat• 17 years ago

You are right, it is a flawed number, it does not take into account "the discouraged(people who gave up looking for work)", "the startup(ie most of YC)", prisoners(1.5% of theworking population in US) and some other groups.

However, 10.2% unemployment even by flawed definition is still significant.

Femur• 17 years ago

It is important to note that unemployment is a lagging indicator; we may be in recovery while unemployment worsens for some time.

http://en.wikipedia.org/wiki/Lagging_indicator

jamesbressi2• 17 years ago

A very good point that I was going to include in my comment on this article and left out in an effort to stay on my topic about the flaws of the calculation.

To support your point, I think it is more well known after this last year that "recession indicators" are lagging and we are typically in a recession a good 3-6 months before it is declared and the reverse is true for when we get out of it.

Thanks for bringing this up.

jswinghammer• 17 years ago

U-6 is now at 17.5%. If unemployment continues to climb all next year is it still lagging or just an indication that our economy is a mess?

I'm voting total mess.

fnid3• 17 years ago

An extended period of unemployment will be very bad for a society based on consumption. Consumer spending accounts for two-thirds of the US economy and consumers are a dying species.

I see few signs that we are in recovery. What I see is boredom with gloom. People want the economy to be in recovery, so they find reasons to believe it so.

bh23ha• 17 years ago

That's true, we may not be in a recovery but in a restructuring. Restructuring an economy is much more painful then a run of the mill recession.

However if we are indeed restructuring to be less of a consumer nation and more of a manufacturing and export nation again, in the long run that's a good thing.

Or to put it in other words, you can't run both trade and fiscal deficits at the same time for ever. Things would not have gone this far if the US didn't have such a huge fiscal deficit, which allowed China to depress their currency by buying US debt. If it had not been for China buying so much US debt, the dollar would have slowly fallen against the yuan over the years, and the yuan would have slowly risen. And if oil wasn't traded in US dollars, we would have invested more in insulation and alternatives much sooner. Now this is all finally happening and it is painful, but unavoidable.

Agathos2• 17 years ago

Did it lag so much on the way down?

SamAtt2• 17 years ago

No, but it had been going down for a while before that so I'm not sure it counts (http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?series_i...)

The beginning of this is generally considered to be the Collapse of Lehman brothers and the dissolutions of Bear Stearns and Merril Lynch which all happened in Sept. 2008. The Unemployment rate in Aug. '08 was 6.2% but that was already up from 4.7% in Aug. '07.

So actually it was a predicting factor on the way down.

jordanb2• 17 years ago

Yes. The recession began in late 2007. Unemployment didn't start spiking until mid-2008.

What happens is that companies are not anxious to start laying off employees when the economy goes south, for a variety of reasons. So they start spreading less work among their existing workforce. Worker productivity and hours worked both go down.

This makes these leading indicators. On the other end, when the economy starts winding up at the end of a recession, the now-lean companies aren't anxious to start hiring again. So instead they start giving their existing workforce more work, asking people to work more hours, etc. So you have the opposite: unemployment stays high for a while while productivity and hours spike.

Worker productivity is currently "surging": http://news.google.com/news/search?aq=f&um=1&cf=all&...

However, hours worked is "holding steady": http://news.google.com/news/search?aq=f&um=1&cf=all&...

What that means, I'm not qualified to say. And it looks like real economists are (as always) of differing opinions on it. Ideally you'd want to see both of those indicators on the up-tick, but given that one is increasing and the other is not getting worse, it's probably a sign that unemployment is going to start going down here pretty soon.

skushch• 17 years ago

Historically, unemployment peaks after the official recession has ended.

http://media-files.gather.com/images/d637/d49/d746/d224/d96/...

btilly2• 17 years ago

Two things about these figures. The first is that you shouldn't believe any historical comparisons. Over the years the US definition of unemployment was revised multiple times, and each time it was revised it was to a methodology that gave lower numbers. Therefore you aren't comparing apples to apples when you compare current figures with, say, the recession in the early 80s.

The other thing to consider is that we aren't out of the woods yet economically. There are still a lot of credit issues out there. You can see http://bentilly.blogspot.com/2009/11/is-financial-crisis-rea... for a list of some of them. And continued jobless numbers are not about to help.

vire• 17 years ago

Great link. Thanks. Funny thing is, when just about everyone I knew was "getting their war on" and "getting their granite countertops on", it all felt ominous to me. I'm afraid that the U.S. is in for a very humbling penance.

Unemployment rate 10.2%

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