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I have no problem balancing the 2 indicators. If they were diverging in their trend lines then I think it would require a closer look. However, they are both indicating an improving employment situation.
I agree, but we should be honest, just because people stopped looking does not mean they are not unemployeed.
Quote:
Originally Posted by WilliamSmyth
Since 1994 the BLS has tracked those who are not looking but want a job. It it high of just over 7 million in 2012. Since then the number has also been trending downwards its now under 6 million. The best it was ever recorded was in the low 4 million range.
Good.
Quote:
Originally Posted by WilliamSmyth
I have no problem with even the U6 number not including people who are not looking.
It would be a false indicator, bringing the U6 rate down even further.
Quote:
Originally Posted by WilliamSmyth
I suppose the BLS could add another number, say the U7, which includes people who are not looking but what a job. Doing so would add increase the rate by roughly 3.6%. However the trend line for this new number would still show an improving situation.
That is what the U6 rate is....
From the note:
Quote:
Persons marginally attached to the labor force are those 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 past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. 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. Updated population controls are introduced annually with the release of January data.
Quote:
Originally Posted by WilliamSmyth
What I find disingenuous are those who wish to compare a prior U3 rate with some new number of their own calculation (U6+). Which is what Stockman did with his calculation arriving at 40%+ unemployment. Anyone claiming UE is 20%+ is adding in individuals who previously would have never been included in the UE calculation.
Agreed, I also think that showing just the U3 rate is also disingenuous....hell most don't even know who the BLS is, much less the U6.
U-6 has dropped remarkably too. It was 17% and now is 9.9%.
U-6 graph
Quote:
Originally Posted by chucksnee
Not denying that....but which is more accurate, the U3 or the U6?
That depends upon the question you are trying to answer. There is no "accurate" unemployment rate, just various indicators of the state of the labor market. What's important to note is that these indicators pretty much move in tandem, so we're not usually confused about whether the market is getting better or worse. (it's getting better.)
U3 measures your desire to work by asking whether you have been actively searching in the recent past; it measures your ability to find work by your taking a job, any job. This can go two ways: there could be people who could find work if they were willing to take any ole'job, including part-time jobs and there could be people who want to work but aren't actively searching because they know that at the moment there's no point. At one time in the 1970s, there were engineers who were driving taxis.
U6 is a wider measure, that includes people who are working part-time but say they want full-time work, it includes people who aren't actively searching but either were working recently or say that they aren't looking for lack of opportunities.
"and have looked for work sometime in the past 12 months" The BLS drops you from the U6 after 12 months. The 6 million I was referring to haven't looked for work in over 12 months, but have indicated they want a job.
The BLS publishes what UE rate is based on. Its not disingenuous on the behalf the BLS if people choose not to inform themselves. These types of distinctions have always been present. In fact there is no way to avoid them. For instance why a 12 month limit to be included in the U6. Why not 6 months or 24 months? At some point if you are not looking for work you shouldn't be included in the UE statistics.
There have always been issues with inclusion of discouraged workers in the official unemployment rate (currently U3). I can remember discussions during the recovery during the Reagan Administration and how the official UE rate excluded discouraged workers.
But a closer look at the details of the jobs report suggests more reason to be worried about the economy weakening than to fear another Fed hike. Not only were overall job gains lackluster and lower for a third straight month, but a large portion of those gains are more than a bit puzzling and probably not something to count on going forward.
Jobs Manufactured
Manufacturers added a surprising 29,000 jobs — tied for the best gain since early 2012. Yet that reading stands in stark contrast to the Institute for Supply Management manufacturing survey earlier in the week showing factories shedding jobs at the fastest pace since 2009. While not as dismal, ADP reported that factory payrolls were unchanged in January.
Meanwhile, the trade deficit widened in December as exports fell for a third straight month, rising 6.9% vs. a year earlier, the Commerce Department said Friday. U.S. manufacturers are struggling as a higher dollar makes it even harder to compete in a sluggish global economy.
Retail Jobs Spike Amid Layoffs, Warnings?
Then there’s the retail sector, which added 57,700 jobs, or 38% of the total gain. The best month of retail hiring in more than three years came even as Wal-Mart (WMT) said it would lay off 10,000 workers and close 154 U.S. stores (though the closings came after the payroll survey week) and as Macy’s (M) closed 40 stores and announced 2,500 layoffs.
Most of the retail job gains appear to be a statistical quirk related to seasonal adjustment.
“Department stores, an industry having a difficult time by any measure, increased payrolls by 13,200 — primarily because they didn’t hire as many in the fall to lay off a lot in January,” said Steve Blitz, chief economist at ITG Investment Research.
Electronics and appliance retailers like Best Buy (BBY) added 8,600 jobs on a seasonally adjusted basis, the best gain in nine years. That doesn’t seem to square with reality, as the sector faces brutal competition from Amazon (AMZN). Nor does it square with the picture Best Buy painted when it reported disappointing holiday sales amid weak demand and price cuts for the Apple (AAPL) iPhone 6S and iPad.
We are slowing starting to emulate the Chinese and Mexican governments when it comes to manipulating numbers lmao
I think we genuinely do have around, somewhat above 5% unemployment; but we have very high underemployment.
Most of my friends are working multiple jobs. I have a Masters Degree, military experience, and worked multiple internships in my industry while in school, but am working a job where most people older than me just have a HS degree. My professors when they graduated with my degree in the 70s - 2000 immediately got a job 2 levels up from what I have. Now it's not good enough, and this is very typical among my peers.
I'm sure older generations will talk about this as "millennial whining" but the fact remains that if someone had the same degrees and experience generations prior they would have much greater opportunity. Similarly, I know that things can be difficult for older adults with much experience who may cost companies a lot of money to employ, who don't get a second chance because they can hire young employees on the cheap. We are more in this together than you realize.
I'm not complaining or pointing blame at anyone, just stating facts and how it relates to unemployment and the state of the economy in general.
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