Friday, January 8, 2010

Employment update (2)

Here's a chart which expands on the one in my previous post. It shows the 6-mo. annualized change in private sector jobs. I focus on private sector jobs in both posts, because the private sector is the more important one. Public sector jobs are going to be very weak for quite some time, given all the budget woes at the state and local level. Private sector jobs are the ones likely to turn up first. I note that private sector jobs actually increased slightly in November, and clearly the rate of decline has improved rather dramatically.


alstry said...

Don't you believe the data the Fed is using right now for unemployment is embarassingly flawed? The business creation in America for the past few years has been steadily declining....but the Fed has failed to make the appropriate adjustments in the birth/death model.

Just factoring the decline in the labor participation rate, the current unemployment figure would be about 12%. Then applying the appropriate adjustments to the birth/death model, we would easily be over 15%.

A more accurate picture for illustrative purposes of current unmemployment at the margin is depicted in this graph from ZeroHedge.

Do you agree?

Rick said...

In 2008, the number of unemployed in the household survey closely correlated to the reduction in non-farm payrolls number. In 2009, the number of unemployed exceeded the non-farm payroll loss by 23% or about 1.2 million persons. Is that divergence typical for the end of a recession?