Virgil Showlion
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Post by Virgil Showlion on Dec 12, 2012 17:05:39 GMT -5
...in a simple chart, courtesy of ZH. ![](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/12/Projected%20Unemployemnt%20Rate_1.jpg) Conditions could deteriorate faster, leading to higher unemployment rates, but the baseline scenario is straightforward. Understand what this means. By October of 2016, if the trends of the past two years continue, the official U3 unemployment rate will be less than 1% despite the lowest ratio of workers to dependents at any time in American history.By October of 2016, even if not a single job is added to the US economy, the official U3 unemployment rate will be less than 1%. If you're graphically oriented: production is proportional to the height of the blue bar, consumption is proportional to the height of all bars combined. Don't drink the kool-aid, my friends. ![:(](//storage.proboards.com/forum/images/smiley/sad.png)
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Driftr
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Post by Driftr on Dec 12, 2012 17:56:33 GMT -5
Pictures certainly are worth 1,000 words.
Can't wait for our favorite baby boomers are causing the decline in participation advocate to show up. As if the cause of the decrease matters even the slightest bit. Saw a poster with USA in their name banned over at Market Ticker today after starting in on that and then swearing at KD. Made me smile.
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Post by djAdvocate on Dec 12, 2012 18:16:11 GMT -5
sorry, but i don't understand this graph.
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Virgil Showlion
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Post by Virgil Showlion on Dec 12, 2012 18:43:10 GMT -5
The values for the bars are on the left axis. The values for the line (unemployment rate) is on the right axis.
Green bar is the number of American adults considered "not in the workforce", and thus not included in any unemployment rate statistics.
Red bar is the number of Americans considered "unemployed" by the BLS U3 statistic, which is the headline unemployment number.
Blue bar is the number of Americans actively employed.
And of course the black line is the unemployment rate.
The blue is staying constant. The red is shrinking as more and more unemployed people drop off the unemployment rolls and are considered "not in the workforce", leading to growth in the green bar. Additionally, the green bar is growing as a result of normal population growth due to immigration.
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Sum Dum Gai
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Post by Sum Dum Gai on Dec 12, 2012 19:20:12 GMT -5
So... you're saying in 2016 unemployment will be really low and I can ask my boss for a raise because my labor is in demand?? ![:P](//storage.proboards.com/forum/images/smiley/tongue.png) Seriously though, is there a way to see the same graph with those not old enough to work stripped out of the green number? I just want to see the ratio of working age employed adults to non working adults. Or is the green bar already only adults that aren't in the work force?
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Virgil Showlion
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Post by Virgil Showlion on Dec 12, 2012 19:29:51 GMT -5
Correct. Which is why the bars sum to 240 million: there are 243 million adults (18+) per the US Census Bureau.
Of course, not all minors are unemployed, so we can't simply add 75 million to the green bar.
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Sum Dum Gai
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Post by Sum Dum Gai on Dec 12, 2012 19:38:01 GMT -5
Holy sheep! I didn't realize only one in four (roughly, the numbers are tough to see on the graph) adults working in the US. Even if we figure every single one of those workers has a stay at home spouse, what are the other two thirds doing?? They can't all be on welfare or living in mom's basement. I wonder just how many folks are making a living in the black market or under the table.
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mmhmm
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Post by mmhmm on Dec 12, 2012 19:41:18 GMT -5
Some may be self-employed, some may be SAHPs, some may be students, and some may be part-time workers (it isn't clear whether part-timers are included, or not). Then, there are those who are retired. To get a really clear picture, those groups would need to be defined, I think.
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Virgil Showlion
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Post by Virgil Showlion on Dec 12, 2012 19:43:56 GMT -5
Holy sheep! I didn't realize only one in four (roughly, the numbers are tough to see on the graph) adults working in the US. Even if we figure every single one of those workers has a stay at home spouse, what are the other two thirds doing?? They can't all be on welfare or living in mom's basement. I wonder just how many folks are making a living in the black market or under the table. Click on the 'click to expand image' link below the image to see full size. Note that the bottom of the graph is 100,000,000, not zero. There are approximately 140 million employees, or roughly 43% of the US population. I've read elsewhere that the number of income tax payers is around 125 million.
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Sum Dum Gai
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Post by Sum Dum Gai on Dec 12, 2012 19:47:58 GMT -5
Ah... there we go. Makes way more sense now. I was seriously confused for a second.
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Post by djAdvocate on Dec 12, 2012 20:20:36 GMT -5
The values for the bars are on the left axis. The values for the line (unemployment rate) is on the right axis. Green bar is the number of American adults considered "not in the workforce", and thus not included in any unemployment rate statistics. Red bar is the number of Americans considered "unemployed" by the BLS U3 statistic, which is the headline unemployment number. Blue bar is the number of Americans actively employed. And of course the black line is the unemployment rate. The blue is staying constant. The red is shrinking as more and more unemployed people drop off the unemployment rolls and are considered "not in the workforce", leading to growth in the green bar. Additionally, the green bar is growing as a result of normal population growth due to immigration. i am still not understanding how the red bar is going to zero. i get the rest of it. what is the basis for this projection?
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Virgil Showlion
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Post by Virgil Showlion on Dec 12, 2012 20:34:54 GMT -5
The BLS U3 headline number considers Americans "unemployed" only if they are employed less than four hours a week, are actively seeking employment in their current state of residence, and are still eligible for emergency extended unemployment benefits, which expire 99 weeks after the first benefit is paid out.
If at any time these conditions cease to be met, the individual is no longer considered "part of the workforce" and thus is no longer "unemployed".
The red bar shrinks naturally over time as long-time unemployed workers run out the 99 week limit on their unemployment benefits. At week 100, the individual is labeled a "long-term discouraged worker" and thereafter excluded from the BLS unemployment metrics. In short: the longer people stay unemployed as a recession drags on, the lower the official unemployment rate gets.
The projection is a hypothetical where the number of employees dropping off the unemployment rolls due to this kind of attrition maintains the same rate over the next four years as it has in the past two.
Obviously this extrapolation can only go so far, and the unemployment rate will ultimately diverge from that curve as "fresh" layoffs occur.
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Post by dumdeedoe on Dec 12, 2012 20:35:57 GMT -5
Persons who are neither employed nor unemployed are not in the labor force. This category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work. Information is collected on their desire for and availability for work, job search activity in the prior year, and reasons for not currently searching. See also Labor force and Discouraged workers. www.bls.gov/cps/cpsaat35.htmBut since the beginning of the financial crisis in late 2008, growth in the Labor Force has completely ground to a halt. In September 2008, the U.S. economy had a Total Labor Force of 154.6 million workers. In April 2012, it has a Total Labor Force of 154.4 million. Thus, over the last 43 months since the beginning of the crisis, the U.S. economy has experienced a net decline in the Total Labor Force. seekingalpha.com/article/563511-there-is-a-disturbance-in-the-labor-forceThe share of the U.S. population receiving Social Security Disability Insurance (DI) benefits has risen rapidly over the past two decades, from 2.2 percent of adults age 25 to 64 in 1985 to close to 6% in 2012. www.ssa.gov/oact/STATS/dibStat.html
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Post by djAdvocate on Dec 12, 2012 20:41:05 GMT -5
The BLS U3 headline number considers Americans "unemployed" only if they are employed less than four hours a week, are actively seeking employment in their current state of residence, and are still eligible for emergency extended unemployment benefits, which expire 99 weeks after the first benefit is paid out. If at any time these conditions cease to be met, the individual is no longer considered "part of the workforce" and thus is no longer "unemployed". The red bar shrinks naturally over time as long-time unemployed workers run out the 99 week limit on their unemployment benefits. At week 100, the individual is labeled a "long-term discouraged worker" and thereafter excluded from the BLS unemployment metrics. In short: the longer people stay unemployed as a recession drags on, the lower the official unemployment rate gets. this assumes that people will not get layed off, though, right? i mean, after all, discouraged workers no longer seeking employment have NEVER been counted in UE3, right? but that didn't mean that unemployment could fall below about 5% (full employment). seriously, i am not seeing how the rate can go to 0%, unless you assume that nobody will get laid off, or nobody new is entering the workforce. neither of these are true.
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Virgil Showlion
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Post by Virgil Showlion on Dec 12, 2012 20:44:53 GMT -5
I know. Read the addendum to my post above.
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Post by djAdvocate on Dec 12, 2012 20:59:02 GMT -5
I know. Read the addendum to my post above. \ post 11?
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Post by dumdeedoe on Dec 12, 2012 21:12:17 GMT -5
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Post by djAdvocate on Dec 12, 2012 21:14:04 GMT -5
bingo. the chronic unemployment is the problem. food stamps are a symptom.
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Post by dumdeedoe on Dec 12, 2012 21:24:25 GMT -5
I keep saying that if we cannot fix the lower level unemployment problem in this country we will be doomed by it..
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Post by djAdvocate on Dec 12, 2012 21:30:49 GMT -5
I keep saying that if we cannot fix the lower level unemployment problem in this country we will be doomed by it.. i am not going to argue with you, but keep in mind that businesses really don't want to fix this problem, and that they are really the ones running things.
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Post by Angel! on Dec 15, 2012 1:24:01 GMT -5
The BLS U3 headline number considers Americans "unemployed" only if they are employed less than four hours a week, are actively seeking employment in their current state of residence, and are still eligible for emergency extended unemployment benefits, which expire 99 weeks after the first benefit is paid out. If at any time these conditions cease to be met, the individual is no longer considered "part of the workforce" and thus is no longer "unemployed". The red bar shrinks naturally over time as long-time unemployed workers run out the 99 week limit on their unemployment benefits. At week 100, the individual is labeled a "long-term discouraged worker" and thereafter excluded from the BLS unemployment metrics. In short: the longer people stay unemployed as a recession drags on, the lower the official unemployment rate gets. . No, that is not how unemployment is calculated. It seems like this is discussed weekly on the boards. Whether or nor someone is eligible for UI has nothing to do with the official unemployment number. www.bls.gov/cps/cps_htgm.htm#unemployedAs far as the graph, it seems kind of ridiculous to assume a 2 year trend will continue unchanged for another 4 years. Especially when the results of the assumption mean an unrealistic result. Why not just continue the trend for 8 years & celebrate our future negative unemployment rate?
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Post by Driftr on Dec 17, 2012 9:12:57 GMT -5
I don't think you're understanding the true purpose of the graph.
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Post by Angel! on Dec 17, 2012 14:28:09 GMT -5
Which is what? To show that unemployment is dropping mostly due to the shrinking workforce? That is true, but that isn't necessarily a bad thing. There is no right level of people in the workforce, it varies & we can expect it to drop off due to boomers retiring.
But assuming that trend will continue to less than 1% unemployment is stupid. Down around 5% you could expect people some to start rejoining the workforce. If it goes lower, then expect outsourcing. The country can't function on a 1% unemployment, so the market will adjust & it wont happen.
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Driftr
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Post by Driftr on Dec 17, 2012 16:22:37 GMT -5
Which is what? To show that unemployment is dropping mostly due to the shrinking workforce? That is true, but that isn't necessarily a bad thing. There is no right level of people in the workforce, it varies & we can expect it to drop off due to boomers retiring.[/quote But assuming that trend will continue to less than 1% unemployment is stupid. Down around 5% you could expect people some to start rejoining the workforce. If it goes lower, then expect outsourcing. The country can't function on a 1% unemployment, so the market will adjust & it wont happen. Looks like you get it although I disagree that % in workforce going down is anything but a bad thing assuming .gov spending stays where it is. Next question though. Have you heard anyone mentioning the recent downturn in the unemployment rate as an economic success story?
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Post by Angel! on Dec 17, 2012 16:46:30 GMT -5
I consider it as a really good start. As for how others see it, I don't know I really don't watch much news coverage for this type of stuff, so I wouldn't know.
In my own experience, things are getting much better. My company is doing fantastic right now & we have been hiring like mad. So when the numbers match the trend I am seeing, it makes sense to me.
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