Unemployment rate to 9.7%, 216,000 jobs lost
The U.S. economy lost 216,000 jobs in August according to figures released by the Department of Labor. This brought the unemployment rate up to 9.7% from 9.4% in July. Despite the large rise in the headline unemployment rate (U-3), the figure for job losses was in line with expectations and dovetailed with the figures released by payroll company ADP on Wednesday. However, revisions to data from June and July increased the cumulative incremental job loss by 69,000 bring the actual net change to last month’s figures to –285,000.
Clearly, the labor market is still quite weak. Below are a few statistics on the overall trend:
- Figures looked weaker using the household survey. The number of unemployed persons based on the this survey increased a massive 466,000, while the number employed edged down by 392,000.
- The 12-month loss in seasonally-adjusted non-farm payrolls (NFP) is still increasing and is at a business cycle high of 5.8 million.
- The cumulative job loss since the business cycle peak NFP is 6.9 million
- Non-farm payrolls in the U.S. economy peaked during the business cycle ending February 2001 at 132.5 million. A full 102 months later in August 2009, they were 131.2 million, 1.3 million lower. This is the weakest growth from the peak of one business cycle to the trough of the next since the Great Depression.
- Nevertheless, the 12-month change in the unemployment rate is now declining, which I have indicated in the past is a good sign of recession and recovery. In June, the increase was 3.9%. It was 3.6% in July and 3.5% in August.
Source
Employment Situation Summary – U.S. Bureau of Labor Statistics
Do you trust or believe the numbers reported?
John Williams at shadowstats thinks that Monthly Payroll Decline Was 300,000
Net of Renewed Seasonal Factor Games
I like John’s work and have quoted from it before. However, I tend to be dubious about reading conspiracies into the data keepers’ agenda. When I think seasonality is at play, I use the year-over-year non-seasonal measures to ‘triangulate.’ These second derivative measures also give a good read on directionality.
Right now the data seem to indicate a slow move away from large job losses – slow enough to worry about a double dip but fast enough to think the recession is probably over.
any comment?
https://about-monster.com/sites/default/files/employment-index/MEIAug09Full%20Report%20-%20FINAL.pdf
It seems that just about everyone is looking for any little bit of info to confirm a rebound. Throwing all this phoney money all around the economy will have some impact, but in the longer term nothing is being done to structurally change the economy to one that is balanced between consumption and savings /service and mfg.
9.7% is nigh close to 10 and we’re just talking “headline” unemployment here. The U6 measure is around 17%. Just how do we interpret these numbers in a positive light? And where do we bears see the 2nd derivative? Accelerating now I would say. Bodes ill, naught but icebergs aheads mateys!
The thing is artificial stimulus can work its magic far better than fundamental analyst types like you wish. It’s completely conceivable, dare I say likely, that we will see a recovery here. That has been the reality for each and every business cycle since jobless recoveries started in 1991.
Almost all of the problems we see today about rising debt levels and unbalanced growth, reckless lending and too big to fail have been hallmarks of every American recession since 1974. Eventually, they will be the death of America’s growth machine but there are plausible arguments that we can get through this ordeal today and continue on the same path.
Recovery to what? It appears that the economy has dropped a few notches and it will not be reboundeding back to past levels for some time. With the ponzi like securitization market kaput, the easy money offered by the rivate sectior has dried up. The govt can continue its schemes until the markets refuse to allow it. At what point does this occur?
I do not recall in past recessions where foreigners were questioning the viability of the dollar. I believe the tipping point has arrived, but it may not unravel into hyperinflation as quickly as people like John Wiliams think.
Higher rates would be devastating to such a levered economy. With so many states in fiscal deficits, we could see waves of layoffs at the public level.
The way I see it, there is no new growth engine in the economy to make up for the phoney lending that carried us for the last decade or more. Is cash for clunkers or $8000 housing credits going to solve our lopsided economy?
I do think that housing sucks up to many subsidies and is overrated as an economic engine.
That has been the reality for each and every business cycle since jobless recoveries started in 1991.
So the recovery is based on hope and a quick look in the rearview mirror?
I’d feel more comfortable if you dazzled me with forwarding looking facts and figures frankly.
Tsk, tsk Edward!
I’m just looking for the counterfactual. I generally agree with your viewpoint. But, I have to probe the counterargument which I am doing by saying these problems are a more severe version of the same from prior recessions. What’s different today?