The Gold Report: In honor of Labor Day, let's discuss unemployment. You estimated that when all workers are counted, the unemployment rate in July was 23% compared to the government's reported rate of 5.4%. What is different about the job market today than before the recession?
John Williams: In a normal economic recovery, people who have lost their jobs start working again as the economy improves. That hasn't happened this time, at least not to the extent suggested by a 5.4% unemployment rate (U3), where the government's headline definition of "unemployed" is quite narrow. To be counted among the headline unemployed, you have to be out of work and actively to have looked for work in the last four weeks. If you want a job, but have given up looking, the government counts you as a "discouraged worker" or "marginally attached worker" and you don't show up in the headline number.
If you haven't looked for work in more than a year, even if you would like to work, then the government just doesn't count you in even its broadest measure of unemployment (U6); you just disappear from any of the unemployment measures. As a result, when the government says that 200,000 fewer people are unemployed in a month, and the headline unemployment rate drops, often there isn't an increase of 200,000 people who are re-employed. They just have been defined out of existence. My broad unemployment estimate includes those no longer tracked by the government, those who cannot find a job, who have given up looking for work for more than a year because nothing is available, yet they still would like to find a job, even though they may be doing other thingslike taking care of grandkids. That broader unemployment number is around 23%.
Each Week Longleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.
While the markets are packed with data throughout the week, the most important numbers will come on Wednesday when the FOMC releases their Interest Rate Decision. We will also hear from the Bank of Japan later in the week, but that report is scheduled as tentative at this point. Aside from these two Central Bank announcements, we expect the scheduled data that includes unemployment, CPI, PPI, Industrial Production, Home Sales, and Retail Sales data to take a back seat. Continue reading "Gold Chart of The Week - Bulls vs. Bears"→
A burst of hiring in February added 236,000 U.S. jobs and reduced the unemployment rate to 7.7 percent from 7.9 percent in January. The strong job growth showed that employers are confident about the economy despite higher taxes and government spending cuts.
The February jobs report issued Friday provided encouraging details: The unemployment rate is at its lowest level in four years. Job growth has averaged more than 200,000 a month since November. Wages rose. And the job gains were broad-based, led by the most construction hiring in six years.
The unemployment rate had been stuck at 7.8 percent or above since September. About half the decline in February occurred because more of the unemployed found jobs. A decline in the number of people looking for work accounted for the other half: People who aren't looking for jobs aren't counted as unemployed. Continue reading "U.S. adds 236K jobs, unemployment falls to 7.7 pct."→
Stocks are on the rise today due to a better than expected report on February hiring from the Jobs Report. We talk a lot about trading with trend here at MarketClub and it seems that the unemployment rate has established a trend. However it doesn't appear to be trending up or down, but rather sideways. The unemployment rate has remained virtually unchanged for the last three months. So we want to know....
As always we would love to hear your opinion on the matter. Please leave a comment below.
It is hard not to be a sore loser in today’s economy. We pay more money for less gas. The prices on groceries have risen, while the value of the dollar has fallen. The unemployment rate is still high, and many of us owe more on our homes than they are worth.
So, how do you think we can turn this economy around? Perhaps we would all like to believe in Bernanke’s theory of Wealth Effect. (“Higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”) However, that doesn’t seem to be happening. So, when do we stop trying to help the economy by buying, buying, buying, and start keeping ourselves safe by saving?
As usual, we would love your feedback and insight. Let us know where your money is going in the comments section.