Saturday, January 2, 2010

Unemployment - Hide the Incline

Sort of the reverse of what the climate people do, but Tyler at Zero Hedge has an interesting article suggesting that:
While the government is willing to admit to a 10% unemployment rate, the numbers have been massaged since about March of last year, and the real U-3 unemployment rate is closer to 13%. Of course this would drive the U-6 up to about 22% which would match Shadowstats number from two posts back.

Remember, when you are told that the Happy Days Are Here Again because "only" 250,000 people were laid off last month as opposed to 255,000 who were laid off the month before, that the pool of unemployed is still growing, not shrinking.


Brad K. said...

I wonder. Has anyone considered that 20% people out of work, means that unemployed people will now be coming from the 80% still working, meaning that each new job loss counts 5/4 what the first job loss cost, to the economy?

Has anyone taken into account that people unemployed part or all of 2009 have mostly depleted savings, assets, and retirement accounts, instead of continuing to manage and grow them? Has this loss of investment asset to the economy been accounted for, in determining what can be taxed? That leaving people unemployed not only reduces the income that should have been taxed, but their assets have been withdrawn - permanently, as in destroyed - as a base for current and future wealth generation and tax revenue?


Billll said...

It's called "transparency".

Pete Murphy said...

Unemployment, both in the U.S. and the world as a whole, marches ever higher because the field of economics doesn't account for the relationship between population density and per capita consumption.

Following the beating the field of economics took over the seeming failure of Malthus' theory, economists adamantly refuse to ever again consider the effects of population growth. If they did, they might come to understand that once an optimum population density is breached, further over-crowding begins to erode per capita consumption and, consequently, per capita employment.

And these effects of an excessive population density are actually imported when a nation like the U.S. attempts to trade freely with other nations much more densely populated - nations like China, Japan, Germany, Korea and a host of others. The result is an automatic trade deficit and loss of jobs - tantamount to economic suicide.

Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!

If you‘re interested in learning more about this important new economic theory, then I invite you to visit my web site at

Pete Murphy
Author, "Five Short Blasts"