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Friday, October 2, 2009

How bad will unemployment get? How bad is it now?

Items of Interest:

Bloomberg:
U.S. Job Losses May Be Even Larger, Model Breaks Down -- The U.S. economic slump earlier this year was so severe it short-circuited the government’s model for calculating payrolls, raising the risk that today’s jobs report may be too optimistic.

About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year, a Labor Department report showed today. The revision would be the biggest since at least 1991...

discussion:
Tyler Durden / Zero Hedge:
BLS Discloses It Has Overrepresented Payroll Data By 824,000 Or 15% -- A part of today's BLS (Bureau of Labor Statistics) announcement that has not received much attention is the BLS' own disclosure that it "may" have lost an additional 824,000 jobs in LTM period ended March 2009, in addition to the already disclosed 4.8 million job losses...

All this simply means is that once the full extent of the collapsing employment picture is revealed on February 5 next year, the market will explode to record highs: after all the worse the economic news are, the better for the stock market...
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Mike Mish Shedlock / Minyanville:
Prepare for Huge Downward Revision in Job Numbers -- Once again, today's job numbers show Collectively, Economists Are a Perpetually Optimistic Lot. Payrolls were expected to drop 175,000, the median of 84 estimates in a Bloomberg News survey of economists. Forecasts ranged from decreases of 260,000 to 100,000.

Jobs losses this month totaled 263,000, worse than even the most pessimistic economist projection.

Actually, economists missed by another 13,000 because revisions subtracted 13,000 from payroll figures previously reported for August and July...

the BLS is going to revise the number by 824,000 . . . that's an extra 68,666 jobs per month the BLS was off between March 2008 and March 2009 . . .

Mish's Global Economic Trend Analysis:
Jobs Contract 21th Straight Month; Unemployment Rate Hits 9.8%
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John Williams / shadowstats.com:
Commentaries --
BLS Revision Nightmare: March 2009 Payrolls Overstated by 824,000
Birth-Death Model Falsely Boosting Jobs Reporting in Recession Environment
Monthly Jobs Loss of 263,000 (Payroll Survey) versus Monthly Employment Decline of 710,000 (Household Survey)
September Unemployment Rates: U.3 = 9.8%, U.6 = 17.0%, SGS (Shadow Gov't Statistics) = 21.4%
related:
Wikipedia:
United States Bureau of Labor Statistics -- The Bureau of Labor Statistics measures employment and unemployment (of those over 15 years of age) using two different labor force surveys[32] conducted by the United States Census Bureau (within the United States Department of Commerce) and/or the Bureau of Labor Statistics (within the United States Department of Labor) that gather employment statistics monthly. The Current Population Survey (CPS), or "Household Survey", conducts a survey based on a sample of 60,000 households. This Survey measures the unemployment rate based on the ILO definition. The data are also used to calculate 5 alternate measures of unemployment as a percentage of the labor force based on different definitions noted as U1 through U6:
  • U1: Percentage of labor force unemployed 15 weeks or longer.
  • U2: Percentage of labor force who lost jobs or completed temporary work.
  • U3: Official unemployment rate per ILO (International Labour Organization) definition.
  • U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
  • U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
  • U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons.
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CNBC:
US Unemployment May Hit 15% in 2010: Strategist -- Unemployment can go as high as 12 to 15 percent in the United States next year, as the economic situation will get worse and more banks will go bankrupt, Nicu Harajchi, CEO at N1 Asset Management, told CNBC Friday...
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The Big Picture:
The Mother of All Jobless Recoveries? -- You can see why the Rutgers study showing a full jobs recovery not taking place until 2017 is very possible...
----
update:
The Big Picture:
The More You Dig Into the Numbers, the Worse They Get -- Barron’s Alan Abelson calls the September employment report “An absolute horror.” ...

“As Doug Kass, our hedge-fund-manager friend, who was a whiz at arithmetic when he was 10 years old and still can do his sums, totes it up, there are 2.2 million of these marginally attached souls, who would like to work but haven’t been able to land a job and aren’t receiving benefits. Add in some 9.2 million involuntary part-timers and the aforementioned 15.1 million formally unemployed, and the jobless total swells to over 26 million.

A compassionate portfolio manager (if there is such an animal), Doug tries to fathom in flesh-and-blood terms what those dry-as-dust dry statistics mean. And what he envisions are 26 million people not going to malls for extras, or taking the kids to the movies, hunting the cheapest victuals they can find at the supermarket and who are denying themselves the pleasures of travel, eating out, upgrading to Windows 7 or buying iPhone apps...
related:
Alan Abelson / Barron's: Downright Scary
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Famous last words:
"At this juncture...the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained." — Ben Bernanke, March 28, 2007.

"From a technical perspective, the recession is very likely over at this point." — Ben Bernanke, the Brookings Institution, September 15, 2009.

zero hedge

Calculated Risk

Mish's Global Economic Trend Analysis

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia