US Unemployment Rates - November 2009

The November US regional and state unemployment figures was recently released. The figures show an overall decrease in the unemployment rates. A total of 37 states had their unemployment rates decrease, while the numbers for 8 states increased; six states had no change. The number of states with double-digit unemployment rates remains at fifteen (not including Puerto Rico). Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) decreased by 0.2%, from 10.2% to 10.0% over October's number. For the past twelve months, the national rate has increased by 2.8% (down 0.4% from last month).
  
• For the most inclusive unemployment rate measured (U-6), the decrease was 0.3%, from 17.5% to 17.2%. For the past twelve months, U-6 has increased by 3.7% (down 1.2% from last month). The spread between U-3 and U-6 decreased from its historic peak of 7.3% in September to 7.2%.
  
• In terms of a monthly change, the states with the largest decreases were Kentucky and Louisiana, both with a decrease of 0.7%. Connecticut and Nevada followed with decreases of 0.6% each. The state with the largest increase was South Carolina, whose unemployment rate rose 0.3% (as did Puerto Rico's).
  
• On an annual basis, the only state remaining with an increase over 5.0% is Michigan, at 5.1%. Three states are tied for second at 4.3% (Alabama, Florida and Nevada).
  
• A total of fifteen states have double-digit unemployment rates, unchanged from October (not including Puerto Rico, which has an unemployment rate of 15.9%). The state with the highest unemployment rate continues to be Michigan at 14.7%, down 0.4%. Rhode Island comes in second with a rate of 12.7% (down 0.2%), while three states tied for third with a rate of 12.3%: California (down 0.2%), Nevada (down 0.6%), and South Carolina (up 0.3%). The remaining states (in declining order) are: Washington D.C. (11.8%), Florida (11.5%), Oregon (11.1%), Illinois (10.9%), 9%), Oregon (11.3%), North Carolina (10.8%), Kentucky and Ohio (both at 10.6%), Alabama (10.5%), Tennessee (10.3%), and Georgia (10.2%).
  
• The states with the lowest unemployment rates are North Dakota (4.1%, down 0.1%), Nebraska (4.5%, down 0.4%), and South Dakota (5.0%, unchanged).
  
• The states with the lowest annual increases are North Dakota and Nebraska at 0.9%, Vermont at 1.1%, Minnesota at 1.3%, Louisiana at 1.4%, and Colorado, Kansas and Montana at 1.5%.
  
• In terms of non-farm payroll employment, four states had significant decreases in the number of jobs. Those states are Hawaii (-6,000), Michigan (-14,000), Mississippi (-6,100) and Nevada (-8,800).
  
• For annual changes in nohttp://www.blogger.com/post-create.g?blogID=2382372744115061946#n-farm payroll employment, the states with the biggest decreases are California (-617,600), Florida (-284,800), Texas (-271,700), Illinois (-250,400), Michigan (-240,200), and New York (-210,500). The states with the smallest decreases are South Dakota (-6,800) and Vermont (-7,800).

The PDF version of the Bureau of Labor Statistics press release can be found here.

US Unemployment Rates - October 2009

The October US regional and state unemployment figures were released today. The figures continue to show an overall increase in the unemployment rates. A total of 30 states had their unemployment rates increase, while the numbers for 14 states decreased; eight states had no change. The number of states with double-digit unemployment rates remains at fifteen (not including Puerto Rico). Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.4%, from 9.8% to 10.2% over September's number. For the past twelve months, the national rate has increased by 3.4%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.5%, from 17.0% to 17.5%. For the past twelve months, U-6 has increased by 4.9%. The spread between U-3 and U-6 increased from 7.2% in September to 7.3%. This is the highest level the spread between U-3 and U-6 has been since the U-6 statistics were first published in January 1994.
  
• In terms of a monthly change, the states with the largest increases were Alaska and Wyoming, both with an increase of 0.6%. Arkansas, Washington D.C., Illinois, and Mississippi all tied for the second largest increase, at 0.5%, while Connecticut, Delaware, Ohio, and South Carolina all had a 0.4% increase.
  
• On an annual basis, three states have increases over 5.0%: Michigan at 6.0% (down 0.4%), Nevada at 5.3% (down 0.6%), and Alabama at 5.2% (down 0.1%).
  
• A total of fifteen states have double-digit unemployment rates, unchanged from September (not including Puerto Rico, which has an unemployment rate of 15.6%). The state with the highest unemployment rate continues to be Michigan at 15.1%, down 0.2%. Nevada comes in second with a rate of 13.0% (down 0.3%), and Rhode Island places third with a rate of 12.9% (down 0.1%). The remaining states (in declining order) are: California (12.5%), South Carolina (12.1%), Washington D.C. (11.9%), Oregon (11.3%), Florida and Kentucky (both at 11.2%), Illinois and North Carolina (both at 11.0%), Alabama (10.9%), Ohio and Tennessee (both at 10.5%), and Georgia (10.2%).
  
• The states with the lowest unemployment rates are North Dakota (4.2%, up 0.1%), Nebraska (4.9%, unchanged), and South Dakota (5.0%, up 0.2%).
  
• The states with the lowest annual increases are North Dakota at 1.0%, Nebraska at 1.3%, Colorado, Montana and Vermont at 1.6%, South Dakota at 1.8%, and Louisiana at 1.9%.
  
• In some good news, six states and the District of Columbia had gains in terms of non-farm payroll employment (i.e., number of jobs). Those states are Texas (41,700), Michigan (38,600), California (25,700), Oklahoma (8,800), Washington D.C. (5,400), and Montana (3,200). Only Wyoming had a statistically significant decrease in the number of jobs (-2,600).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-687,700), Florida (-339,600), Texas (-307,200), Illinois (-286,300), Michigan (-262,700), Ohio (-243,200), New York (-242,500) and Georgia (-228,000). The states with the smallest decreases are South Dakota (-7,800) and Vermont (-10,700).

The PDF version of the Bureau of Labor Statistics press release can be found here.

Economics Links (9 June 2009)

Sorry for not posting this here last week.

Angry Bear:
Untitled post on the Unemployment Report

Current Recession vs the 1980-82 Recession


Econbrowser:
DeGlobalization: Transitory or Persistent?

Not a Robust Recovery

James Pethokoukis: "An Improving Job Market"

Output, Employment and Industrial Production in the "1980-82 Recession"

More on Bank Lending Data

High Anxiety (about Interest and Inflation Rates)


Economist's View:
Too Big to be Restructured (The theme of this essay ties in very well with my post on Mikhail Gorbachev's essay from the other day, "We Had Our Perestroika. It's High Time for Yours.".)

Contributions to the Change in Nonfarm Payroll Employment

Shiller: Home Prices May Keep Falling

Uneven Unemployment Rates

"VAT Time?"

Bank Mergers

"Reducing Inequality: Put the Brakes on Globalization?"


Financial Times:
The ‘part-timezation’ of America


Reuters:
China influence to grow faster than most expect: Soros


Real Property Alpha:
California Home Prices in Ounces of Gold


True/Slant:
NASCAR helped GM down its path of self-destruction ("Better equipped to compete? How ironic, given NASCAR’s role in helping the auto industry race down its path of self-destruction. Major auto companies used NASCAR for years to push cars and trucks with poor fuel economy numbers. The sport, in some ways, came to symbolize America’s embrace of consumption.")


VoxEU:
Why is Japan so heavily affected by the global economic crisis? An analysis based on the Asian international input-output tables

Does climate change affect economic growth?


Washington Post:
Book Review: The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

US Unemployment Rates - April 2009

The April US regional and state unemployment figures were recently released. The figures, overall, seem to have stabilized somewhat, even though the national unemployment rate increased by nearly one-half of one percent. Almost one-half of the states had their unemployment rates improve, while the number of states with double-digit unemployment rates remained steady, at eight. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.4%, from 8.5% to 8.9% over March's number. For the past twelve months, the national rate has increased by 3.9%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.2%, from 15.6% to 15.8%. For the past twelve months, U-6 has increased by 6.6%. (If there is one bit of good news with respect to U-6, it is that the spread between U-3 and U-6 decreased slightly, from 7.1% in March to 6.9% in April. This is the first time since March 2008 that this particular number has decreased.)
  
• In terms of a monthly change, the state with the largest increase was West Virginia, with an increase of 0.7%. Ohio and Rhode Island tied for the second largest increase, at 0.5%, while Connecticut, Illinois, Louisiana and Puerto Rico all had a 0.4% increase.
  
• A total of twenty-one states had their monthly unemployment rates go down in April, with an additional eleven remaining unchanged. The previous month, only two states had their unemployment rates go down with three remaining unchanged.
  
• On an annual basis, four states have increases over 5.0%: Oregon at 6.4% (down 0.2%), South Carolina at 5.3% (down 0.2%), North Carolina at 5.1% (down 0.4%), and Michigan at 5.0% (unchanged).
  
• The states with the lowest annual increases are North Dakota at 1.0%, Iowa and Nebraska at 1.1%, Alaska at 1.4%, and Arkansas at 1.6%.
  
• A total of eight states have double-digit unemployment rates, unchanged from March (and not counting Puerto Rico, which has an unemployment rate of 15.4%). The state with the highest unemployment rate is Michigan (once more), at 12.9%, up 0.3%. Oregon comes in second with a rate of 12.0% (up 0.1%), and South Carolina places third with a rate of 11.5% (up 0.1%). In fourth place is Rhode Island with a rate of 11.1% (up 0.5%). In fifth place is California at 11.0% (down 0.2%); in sixth is North Carolina at 10.8% (unchanged), and in seventh is Nevada at 10.6% (up 0.2%). The newest state in the ranks of the double-digit unemployment rates is Ohio, at 10.2%, up 0.5%. Indiana, which had been among the double-digit states last month, dropped down 0.1% to 9.9%.
  
• The states with the lowest unemployment rates are North Dakota (4.0%, down 0.2%), Nebraska (4.4%, down 0.3%), Wyoming (4.5%, unchanged), South Dakota (4.8%, down 0.1%), Iowa (5.1%, down 0.1%) and Utah (5.2%, unchanged).
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since March are California (-63,700), Texas (-39,500), and Michigan (-38,400).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-706,700), Florida (-380,300), Michigan (-284,800), Ohio (-262,600) and Illinois (-255,400).

The PDF version of the Bureau of Labor Statistics press release can be found here.

Is the Recession Over? Flip a Coin.

James Hamilton at Econbrowser has been looking over initial claims for unemployment insurance the past few weeks. His most recent post suggests a 50% chance that the recession may end by June. Remember that unemployment is a lagging economic indicator so that, if we really are nearing the end of the recession, then this decrease in initial unemployment insurance claims is a very good sign. On the other hand, as Dr. Hamilton points out, there's still a very good chance (50% historically) that unemployment claims could go back up again, something that's readily apparent in the first graph in my post back in February on US unemployment levels.

The Labor Department reported today that initial claims for unemployment insurance fell by 14,000 during the most recent available week. That brings the 4-week average down for the third consecutive week and puts it 3.3% below the peak reached April 9.

Black line: seasonally adjusted new claims for unemployment insurance, weekly since January. Blue line: average of 4 most recent weeks as of each date.


That ongoing drop in the 4-week average is noteworthy because in each of the last 5 recessions, once the new claims number began declining from its peak value reached during the recession, the NBER subsequently dated the recovery from that recession as beginning within 8 weeks.

...

If we leave out the 1970 recession, there are 230 weeks in which the NBER declared the economy to have been in recession during the 5 recessions of 1974, 1980, 1982, 1990, and 2001. In 22 of these weeks, we saw as big a drop as we've seen this month, namely, the 4-week average dropped by more than 3.3% over a 3-week period. Of these 22 favorable readings, 11 turned out to be part of the final move out of recession, while in the other 11, new claims turned back up to reach a subsequent higher peak. Thus, if all you had to go on was the data on new unemployment claims and its behavior in previous recessions, you might conclude that there's a 50% chance that an economic recovery will have started by the beginning of June.

For some other possible signs of "green shoots," check out Bonddad's post on inventory levels in the 1Q09 GDP report.

US Unemployment Rates - March 2009

The March US regional and state unemployment figures were released on April 17th. The figures, overall, continue to worsen, although there was some slight signs of improvement in several states. One state, North Dakota, and the District of Columbia had declining unemployment rates, while three states recorded no change in the past month. On the other hand, Indiana has joined the ranks of states with double-digit unemployment rates, which now total eight. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.4%, from 8.1% to 8.5%, over February's number. For the past twelve months, the national rate has increased by 3.4%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.8%, from 14.8% to 15.6%. For the past twelve months, U-6 has increased by 6.5%.
  
• In terms of monthly change, the state with the largest increase was Oregon, with an increase of 1.4%. Washington and West Virginia tied for the second largest increase, at 0.9%, while Wisconsin came in fourth with a 0.7% increase.
  
• On an annual basis, four states have increases over 5.0%: Oregon at 6.6%, South Carolina at 5.5%, North Carolina at 5.5%, and Michigan at 5.0%.
  
• The states with the lowest annual increases are North Dakota at 1.2%, Iowa at 1.3%, Nebraska at 1.5%, Louisiana and Wyoming at 1.6%, Arkansas at 1.7%, and Utah at 1.9%.
  
• A total of eight states now have double-digit unemployment rates, up from seven in February. The state with the highest unemployment rate is Michigan, at 12.6%, up 0.6%. Oregon comes in second with a rate of 12.1% (up 1.4%), and South Carolina places third with a rate of 11.4% (up 0.5%). In fourth place is California with a rate of 11.2%, up 0.6%. In fifth place is North Carolina at 10.8% (up 0.1%); in sixth is Rhode Island at 10.5% (no change), and in seventh is Nevada at 10.4% (up 0.4%). The newest state in the ranks of the double-digit unemployment rates is Indiana, at 10.0%, up 0.6%.
  
• The state of North Dakota and the District of Columbia both had positive (i.e., negative) changes in their unemployment rates. Both dropped down 0.1% each, from 4.3% to 4.2% for North Dakota, and from 9.9% to 9.8% for Washington D.C.
  
• As mentioned above, Rhode Island (10.5%) had no change in its unemployment rate between February and March; the other two states with no change are Georgia (9.2%) and New York (7.8%).
  
• The states with the lowest unemployment rates continue to be North Dakota (4.2%, down 0.1%), Wyoming (4.5%, up 0.6%), Nebraska (4.6%, up 0.3%), South Dakota (4.9%, up 0.3%) and Utah (5.2%, up 0.1%).
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since February are California (-62,100), Florida (-51,900), and Texas (-47,100).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-637,400), Florida (-424,300), Michigan (-270,500), and Illinois (-232,600).

The PDF version of the Bureau of Labor Statistics press release can be found here.

US Unemployment Rates - February 2009

The February US regional and state unemployment figures were released on March 27th. The figures, overall, continue to be bad, although some of the over-the-month rate changes between January and February were not as severe as they were the month before. One state, Nebraska, also had a declining unemployment rate. On the other hand, the number of states with double-digit unemployment rates has increased to seven. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.5%, from 7.6% to 8.1%, over January's number. For the past twelve months, the national rate has increased 3.3%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.9%, from 13.9% to 14.8%. For the past twelve months, U-6 has increased by 5.8%.
  
• In terms of monthly change, the states with the largest increases were North Carolina and Oregon, with changes of 1.0% each. One state, New Jersey, had a 0.9% increase, while four states had 0.8% increases. Those states are Georgia, Hawaii, New York and West Virginia.
  
• On an annual basis, three states have increases over 5.0%: North Carolina at 5.5%, Oregon at 5.4%, and South Carolina at 5.3%. Michigan and Nevada are tied for fourth at 4.6%.
  
• The states with the lowest annual increases are Iowa at 1.0%, Wyoming at 1.1%, Nebraska at 1.2%, and North Dakota at 1.3%.
  
• A total of seven states now have double-digit unemployment rates, up from four in January. The state with the highest unemployment rate is Michigan, at 12.0%, up 0.4%. South Carolina comes in second with a rate of 11.0% (up 0.6%), and Oregon places third with a rate of 10.8% (up 1.0%). In fourth place is North Carolina with a rate of 10.7%, also up 1.0%. Tied for fifth place is California and Rhode Island, both with a rate of 10.5%, up 0.4% for California and 0.2% for Rhode Island. The seventh place state, Nevada, also has double-digit unemployment with a rate of 10.1%, up 0.7%.
  
• The states with the lowest unemployment rates continue to be Wyoming (3.9%, up 0.2%), Nebraska (4.2%, down 0.1%), North Dakota (4.3%, up 0.1%), South Dakota (4.6%, up 0.2%) and Iowa (4.9%, up 0.1%).
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since January were California (-116,000), Florida (-49,500), and Texas (-46,100).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-605,900), Florida (-399,400), Michigan (-277,000), and Ohio (-222,100).

The PDF version of the Bureau of Labor Statistics press release can be found here.

US Unemployment Rates - January 2009

The January US regional and state unemployment figures were released on March 11th. The figures, overall, continue to get worse, although there was one minor bright spot in the District of Columbia. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.4%, from 7.2% to 7.6%, over December's number. For the past twelve months, the national rate has increased 2.7%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.4%, from 13.5% to 13.9%. For the past twelve months, U-6 has increased by 4.9%.
  
• In terms of monthly change, the states with the largest increases were North Carolina, Oregon, and South Carolina, all with a 1.6% increase; four states had a 1.4% increase, California, Indiana, Michigan, and Ohio, while three states had a 1.3% increase, Alabama, Maine and Washington.
  
• On an annual basis, two states tied for the largest increase, North Carolina and South Carolina, both at 4.7%. The next three are Oregon (4.6%), Indiana (4.4%), and Michigan (4.3%).
  
• The states with the lowest annual increases are Iowa at 0.9%, Wyoming at 1.0%, and North Dakota and West Virginia at 1.2%.
  
• The state with the highest unemployment rate is Michigan, which increased 1.4% to 11.6%; South Carolina comes in second with a rate of 10.4% (up 1.6%), and Rhode Island places third with a rate of 10.3% (up 0.9%). California also has a double-digit unemployment rate of 10.1%, up 1.4%.
  
• The states with the lowest unemployment rates continue to be Wyoming (3.7%, up 0.3%), North Dakota (4.2%, up 0.7%), Nebraska (4.3%, up 0.3%) and South Dakota (4.4%, up 0.5%).
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since December were California (-79,300), Michigan (-60,800), Ohio (-59,600) and Texas (-50,600).
  
• The one bright spot in terms of non-farm payroll employment was an increase in the number of jobs in the District of Columbia, up 5,800 (perhaps due to the change in administration and a corresponding ripple effect through the local economy).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-494,000), Florida (-355,700), Michigan (-263,800), and Ohio (-214,600). Wyoming is the only state that continues to have a positive annual change in employment, up 7,000 jobs for the year.

The PDF version of the Bureau of Labor Statistics press release can be found here.

US Employment Levels Analysis

After publishing my previous post yesterday, I decided to take a closer look at the numbers.

My first thought was, while comparing the current recession to the previous two downturns makes sense, I didn't know how this recession compared to the others before 1990-91, such as the big recession in 1981-82 (a vivid memory for myself). Were there any recessions that were worse than either 1981-82 or 2007-09? (For my analysis, I'm using November 2007 as the start of the current recession.)

What I did was to download the US employment levels data, seasonally adjusted, from the Bureau of Labor Statistics (BLS) for the period of January 1948 to the present. From this data, I found nine downturns in which employment sank on a significant basis, followed by a recovery period. I then took percentages from the nine downturns in which the highest level of employment prior to the downturn (the peak month) is equal to 100%. Following months, through to the point where the employment level once more reached the level of the peak month, were then compared as a percentage to the peak month.

What I found is that the 2007-09 recession is already the eighth worst downturn of the nine. Through January 2009, the employment level is at 96.89% of the peak month's level, a drop of 3.11%. Only the 1953-54 recession is worse (-3.82%). And, of course, there is no bottom in sight yet for the 2007-09 data; if current trends continue, 1953-54's record will be broken in either February or March at the latest.

Adding to the distress is the fact that 2007-09 is already in its fourteenth month past the peak. Only two other downturns took longer: 1953-54, which lasted sixteen months, and 1981-82, which lasted twenty months.

Eventually, of course, previous recessions reached a bottom and then began a period of economic recovery. Of the eight previous recoveries, the average length of time was 12.38 months from the trough month through to the level where employment reached the previous peak. (It should be noted, though, that the previous two recoveries, 1991-93 and 2002-03, took twenty-one and seventeen months respectively, which were by far the two longest recoveries since 1948.)

If the 1953-54 recession is any guide to what may be in store for this recession, any recovery back to November 2007 employment levels will not occur prior to March 2010 at the earliest, and quite possibly not until August-December 2010.

Let's hope I'm wrong, and that we reach the trough and the recovery months more quickly.

3,600,000 and Counting

Here's a graph to make you wet your pants a little. As The Gavel points out, the current recession is much, much more serious in terms of job losses to date (3.6 million and counting) than the previous two. And there's no bottom in sight.

This chart compares the job loss so far in this recession to job losses in the 1990-1991 recession and the 2001 recession – showing how dramatic and unprecedented the job loss over the last 13 months has been. Over the last 13 months, our economy has lost a total of 3.6 million jobs – and continuing job losses in the next few months are predicted.

By comparison, we lost a total of 1.6 million jobs in the 1990-1991 recession, before the economy began turning around and jobs began increasing; and we lost a total of 2.7 million jobs in the 2001 recession, before the economy began turning around and jobs began increasing.

US Unemployment Rates - December 2008

The December US regional and state unemployment figures were released in late January. The figures, overall, continue to get worse. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.4%, from 6.8% to 7.2%, over November's number. (November's percentage was revised upward by 0.1%.) For the past twelve months, the national rate has increased 2.3%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.9%, from 12.6% to 13.5%. For the past twelve months, U-6 has increased by 4.8%.
  
• In terms of monthly change, the states with the largest increases were Indiana and South Carolina, both with a 1.1% increase; six states had a 1.0% increase: Massachusetts, Michigan, Nevada, New Jersey, New York and Oregon.
  
• On an annual basis, the state with the largest increase continues to be Rhode Island with an increase of 4.8%. North Carolina remains in second place with an increase of 4.0%, and Nevada has jumped into third with an increase of 3.9%.
  
• The states with the lowest annual increases are North Dakota at 0.3%, Arkansas at 0.7%, and Iowa and Oklahoma at 0.8% each.
  
• The state with the highest unemployment rate is Michigan, which increased 1.0% to 10.6%; Rhode Island remains in second place, with a rate of 10.0% (up 0.7%). South Carolina comes in third at 9.5% (up 1.1%).
  
• The states with the lowest unemployment rates continue to be Wyoming (3.4%, up 0.2%), North Dakota (3.5%, up 0.2%), and South Dakota (3.9%, up 0.5%).
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since November were California (-78,200), Michigan (-59,000), and New York (-54,000).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-257,400), Florida (-255,200), and Michigan (-173,000). Texas continues to be the nation's bright spot, with an annual increase of 153,700, down 67,500 from November.

The PDF version of the Bureau of Labor Statistics press release can be found here.

US Unemployment Rates - November 2008

The November US unemployment figures were released recently. The figures, overall, are continuing to get worse. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.2%, from 6.5% to 6.7%, over October's number. For the past twelve months, the national rate has increased 2.0%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.7%, from 11.8% to 12.5%. For the past twelve months, U-6 has increased by 4.1%.
  
• In terms of monthly change, the state with the largest increase was Oregon (again), with a 0.9% increase; North Carolina had the next largest increase, at 0.8%, and the District of Columbia and Indiana had increases of 0.7% each.
  
• On an annual basis, the state with the largest increase continues to be Rhode Island with an increase of 4.1%. North Carolina has moved into second place, with an increase of 3.2%, and Georgia and Idaho are tied for third with increases of 3.0% each.
  
• The states with the lowest annual increases are Nebraska at 0.4%, Iowa and South Dakota at 0.5%, Wisconsin at 0.8%, and Kansas, New Hampshire and Utah at 0.9%.
  
• The state with the highest unemployment rate is Michigan, which increased 0.3% to 9.6%; Rhode Island, which was tied for the highest rate in October remained at 9.3% to place second. California and South Carolina are tied for third with a rate of 8.4%.
  
• The states with the lowest unemployment rates continue to be Wyoming (3.2%), North Dakota (3.3%), and South Dakota (3.4%). Utah has been joined by Nebraska at 3.7% each.
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since October were Florida (-58,600), North Carolina (-46,000), California (-41,700), Michigan (-36,900) and Georgia (-30,000).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are Florida (-206,900), California (-136,000), Michigan (-112,700), and Arizona (-82,200). Two states continue to have statistically significant increases over the past year: Texas (221,200; down 9,200 from October) and Wyoming (8,200; down 1,300).

The PDF version of the Bureau of Labor Statistics press release can be found here.

U.S. Unemployment Rates: Where Do We Stand?

The October US unemployment figures were recently released and, with very few exceptions, the numbers are rather dismal. (Highlights can be found here.) The numbers that were released, however, are only the "official" statistics. Meaning, the official unemployment rate that the U.S. Bureau of Labor Statistics gives out in its monthly press release is only one of six unemployment rates that it actually calculates. The "official" unemployment rate is the not-so-imaginatively named "U-3." There are two smaller unemployment rates (U-1 and U-2), and three larger (U-4 through U-6). What I'm concerned about is U-6.

The official definition of U-6 is:

Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

...where...

Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

Yada yada yada.

In essence, U-6 covers everyone who's either unemployed, whether they receive unemployment benefits or not, or might be working a part-time job but who really want to be working full-time (i.e., they're underemployed).


On to the statistics then. In October, the "official," U-3 unemployment rate was 6.5%. This is the highest unemployment rate we've seen since March 1994. However, the U-6 unemployment rate in October was 11.8%. This is the fourth month in a row that U-6 has been over 10%, with the lowest rate this year having been in February, at 8.9%. The last time U-6 was this high was in January 1994, when it was 11.8%. (Ironically, this is also the very first month U-6 was published.)


As most economists are presuming today, the country is almost certainly in a recession at this time (even though it hasn't been officially announced yet). How do these unemployment rates, then, compare against the last three recessions? U-6, being a rather limited series of data, only covers one time period when unemployment was almost as bad as it is today. In June 2003, U-3 peaked at 6.3%, while U-6 peaked in September, at 10.4%; the largest spread between the two unemployment rates that year was 4.3%.

The next earliest spike in unemployment rates happened in June 1992, when U-3 reached 7.8%. However, there wasn't any U-6 rate at that time, so we can only guess what it might have been. Doing a little spreadsheet analysis, my own guess is that the spread between U-3 and U-6 at the time was about 5.3%; add that to the 7.8% and the hypothetical U-6 unemployment rate may have been about 13.1%. The worst of the three recessions, though, was that of the early 80s. U-3 peaked in November and December 1982 at 10.8%; this is the only time U-3 has ever peaked above 10% since 1948, when the current series of unemployment rate data starts. Assuming that the spread between U-3 and the hypothetical U-6 was still around 5% at that time (and I think it may have actually been larger), total unemployment and underemployment probably would have been around 16% in late 1982.

So. Unemployment is bad now. It's slightly worse than it was six years ago, but it's also not as bad as it was back in the early 90s or the early 80s, which was much, much worse. Consider that your positive thought for the day. ;)

US Unemployment Figures - October 2008

The October US unemployment figures were released on Friday. Unsurprisingly, the numbers were not good, although there were a few positive surprises. Here are some of the highlights:

• Overall, the national unemployment rate increased by 0.4%, from 6.1% to 6.5%, over September's number. For the past twelve months, the national rate has increased 1.7%.
  
• In terms of monthly change, the state with the largest increase is Oregon, with a 0.9% increase; Alaska and South Carolina have the next two largest increases, at 0.7% each.
  
• On an annual basis, the state with the largest increase is Rhode Island, which has nearly doubled in the past twelve months, from 5.1% to 9.3%, an increase of 4.2%. Florida had the second largest increase, at 2.7%, followed closely by the states of Idaho (2.6%), California, Georgia and Nevada (all at 2.5%).
  
• The state with the highest unemployment rate are the states of Rhode Island and Michigan, both of which are at 9.3%. California is in third with a rate of 8.2%, followed by South Carolina with a rate of 8.0%.
  
• States with the lowest unemployment rates are primarily located in the west and upper mid-west: Wyoming and South Dakota (3.3%), North Dakota (3.4%), and Utah (3.5%).
  
• In terms of non-farm payroll employment (i.e., number of jobs), states with the biggest decreases since September were Washington (-29,300), Florida (-27,300), Michigan (-19,600), and Arizona (-17,700).
  
• For annual changes in non-farm payroll employment, states with the biggest decreases are Florida (-156,200), California (-101,300), Michigan (-71,200), and Arizona (-70,400). However, two states had statistically significant increases over the past year: Texas (230,400) and Wyoming (9,500).

The PDF version of the Bureau of Labor Statistics press release can be found here.

Want a Job? Vote for a Democrat!

A couple of interesting posts on unemployment today, the first being from Spencer at Angry Bear:

So much for Sarah Palin's claim that Republican tax cuts create jobs. In the post WW II era every Democratic President has left office with a lower unemployment rate than they inherited from their predecessor while only one Republican president left office with a lower unemployment rate than they inherited. That was Ronald Reagan, but his first term still holds the record for the highest average unemployment rate of any post - WW II four year Presidential term.

George Bush inherited a 3.9% unemployment rate and the results of all his tax cuts has been a rise in the unemployment rate to 6.1%, so far. By contrast Bill Clinton inherited a 7.4% unemployment rate and with his prudent fiscal policy left Bush a 3.9% unemployment rate.

Leave it to Team Bush to be the only American President to throw a war that failed to stimulate the economy.

Another scary graph comes from Economist's View:

A grim morning: Double plus ungood news on multiple fronts this morning. The credit crunch is getting worse: LIBOR jumped again, the TED spread is at a new record. Bad news on employment: payrolls down 159,000, average work week down, official unemployment rate flat at 6.1 percent but broad measure (U6) up from 10.7 to 11.

We are going over the edge.

The track record: This chart shows U6, the broadest measure of unemployment and underemployment from the Bureau of Labor Statistics. (No data available before 1994.)

Kevin Phillips: Numbers Racket: Why the Economy is Worse Than We Know

Kevin Phillips, author of American Theocracy (a book I endorse), has an article in Harper's Magazine about the fudging of economic data by the American government. The problem, according to Phillips, apparently began with the Kennedy administration and has continued on an erratic basis through to the present day, with the guilt being shared by both Democratic and Republican administrations. The first third of the article documents how the Consumer Price Index (CPI), unemployment statistics, and the gross domestic product (GDP) numbers have all been manipulated over the decades, not necessarily out of some grand conspiratorial plot, but out of "accumulating opportunisms."


Sources: John Williams, ShadowStats.com, U.S. Bureau of Labor

The second third of the article looks a little more deeply at the opacity that has developed over the three economic statistics mentioned above:

Of the "big three" statistics, let us start with unemployment. Most of the people tired of looking for work, as mentioned above, are no longer counted in the workforce, though they do still show up in one of the auxiliary unemployment numbers. The BLS has six different regular jobless measurements—U-1, U-2, U-3 (the one routinely cited), U-4, U-5, and U-6. In January 2008, the U-4 to U-6 series produced unemployment numbers ranging from 5.2 percent to 9.0 percent, all above the "official" number. The series nearest to real-world conditions is, not surprisingly, the highest: U-6, which includes part-timers looking for full-time employment as well as other members of the "marginally attached," a new catchall meaning those not looking for a job but who say they want one. Yet this does not even include the Americans who (as Austan Goolsbee puts it) have been "bought off the unemployment rolls" by government programs such as Social Security disability, whose recipients are classified as outside the labor force.

Second is the Gross Domestic Product, which in itself represents something of a fudge: federal economists used the Gross National Product until 1991, when rising U.S. international debt costs made the narrower GDP assessment more palatable. The GDP has been subject to many further fiddles, the most manipulatable of which are the adjustments made for the presumed starting up and ending of businesses (the "birth/death of businesses" equation) and the amounts that the Bureau of Economic Analysis "imputes" to nationwide personal income data (known as phantom income boosters, or imputations; for example, the imputed income from living in one's own home, or the benefit one receives from a free checking account, or the value of employer-paid health-and-life-insurance premiums). During 2007, believe it or not, imputed income accounted for some 15 percent of GDP. John Williams, the economic statistician, is briskly contemptuous of GDP numbers over the past quarter century. "Upward growth biases built into GDP modeling since the early 1980s have rendered this important series nearly worthless," he wrote in 2004. "[T]he recessions of 1990/1991 and 2001 were much longer and deeper than currently reported [and] lesser downturns in 1986 and 1995 were missed completely."

Nothing, however, can match the tortured evolution of the third key number, the somewhat misnamed Consumer Price Index. Government economists themselves admit that the revisions during the Clinton years worked to reduce the current inflation figures by more than a percentage point, but the overall distortion has been considerably more severe. Just the 1983 manipulation, which substituted "owner equivalent rent" for home-ownership costs, served to understate or reduce inflation during the recent housing boom by 3 to 4 percentage points. Moreover, since the 1990s, the CPI has been subjected to three other adjustments, all downward and all dubious: product substitution (if flank steak gets too expensive, people are assumed to shift to hamburger, but nobody is assumed to move up to filet mignon), geometric weighting (goods and services in which costs are rising most rapidly get a lower weighting for a presumed reduction in consumption), and, most bizarrely, hedonic adjustment, an unusual computation by which additional quality is attributed to a product or service.

...

"All in all," Williams points out, "if you were to peel back changes that were made in the CPI going back to the Carter years, you'd see that the CPI would now be 3.5 percent to 4 percent higher"—meaning that, because of lost CPI increases, Social Security checks would be 70 percent greater than they currently are.

Furthermore, when discussing price pressure, government officials invariably bring up "core" inflation, which excludes precisely the two categories—food and energy—now verging on another 1970s-style price surge. This year we have already seen major U.S. food and grocery companies, among them Kellogg and Kraft, report sharp declines in earnings caused by rising grain and dairy prices. Central banks from Europe to Japan worry that the biggest inflation jumps in ten to fifteen years could get in the way of reducing interest rates to cope with weakening economies. Even the U.S. Labor Department acknowledged that in January, the price of imported goods had increased 13.7 percent compared with a year earlier, the biggest surge since record-keeping began in 1982. From Maine to Australia, from Alaska to the Middle East, a hydra-headed inflation is on the loose, unleashed by the many years of rapid growth in the supply of money from the world's central banks (not least the U.S. Federal Reserve), as well as by massive public and private debt creation.

U.S. Unemployment Rates:
Red - Including workers who are part-time for "economic reasons"
Yellow - Including other "marginally attached" workers
Blue - Including "discouraged" workers
Black - The official "unemployment rate"

Source: US Bureau of Labor Statistics

The last third of the article sums up the numerous economic problems the U.S. is currently facing:

The real numbers, to most economically minded Americans, would be a face full of cold water. Based on the criteria in place a quarter century ago, today's U.S. unemployment rate is somewhere between 9 percent and 12 percent; the inflation rate is as high as 7 or even 10 percent; economic growth since the recession of 2001 has been mediocre, despite a huge surge in the wealth and incomes of the superrich, and we are falling back into recession. If what we have been sold in recent years has been delusional "Pollyanna Creep," what we really need today is a picture of our economy ex-distortion. For what it would reveal is a nation in deep difficulty not just domestically but globally.

Undermeasurement of inflation, in particular, hangs over our heads like a guillotine. To acknowledge it would send interest rates climbing, and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American economy. Moreover, the rising cost of pensions, benefits, borrowing, and interest payments—all indexed or related to inflation—could join with the cost of financial bailouts to overwhelm the federal budget. As inflation and interest rates have been kept artificially suppressed, the United States has been indentured to its volatile financial sector, with its predilection for leverage and risky buccaneering.

Arguably, the unraveling has already begun. As Robert Hardaway, a professor at the University of Denver, pointed out last September, the subprime lending crisis "can be directly traced back to the [1983] BLS decision to exclude the price of housing from the CPI. . .With the illusion of low inflation inducing lenders to offer 6 percent loans, not only has speculation run rampant on the expectations of ever-rising home prices, but home buyers by the millions have been tricked into buying homes even though they only qualified for the teaser rates." Were mainstream interest rates to jump into the 7 to 9 percent range—which could happen if inflation were to spur new concern—both Washington and Wall Street would be walking in quicksand. The make-believe economy of the past two decades, with its asset bubbles, massive borrowing, and rampant data distortion, would be in serious jeopardy. The U.S. dollar, off more than 40 percent against the euro since 2002, could slip down an even rockier slope.

The credit markets are fearful, and the financial markets are nervous. If gloom continues, our humbugged nation may truly regret losing sight of history, risk, and common sense.

HT: Economist's View