Employment is, obviously, the other side of the coin of unemployment. Interestingly it is following an EW pattern very similar to most stock markets. Curiously over the last few months employment has gone down and so has unemployment, truly a miracle!
“Shadow Government Statistics” is a great web site that makes it it’s business to calculate various government statistics in a way that they believe is more accurate or appropriate. Often this involves going back in time and using methods that were used in the past; arguable this leads to a better presentation of the numbers. This is what they posted today for unemployment;
The explanation is given as follows;
SGS stands for “Shadow Government Statistics”. The one that all the fuss today was about is the one in red. The one above that (in grey) is reported publically as well but is down played by the media. The real unemployment rate, according to the authors of this website is the blue one, at the top. It is more in line with unemployment rates all over the world. In case it is not entirely clear what a discouraged worker is , here is the definition;
In Canada if you are unemployed AND collecting EI (Employment Insurance) you are required to report every two weeks that you are still available to work. No questions are asked with respect to what you might have done in order to obtain work. After EI stops, usually quite soon and that is assuming that you get it in the first place, no reporting whatsoever occurs. How they do it in the US I have no idea but if for statistical reasons you can exclude anyone who has not stated an intent to look for just 4 weeks, than clearly the result becomes almost meaningless. When adjusted for this factor (the blue line) unemployment has actually increased on balance for the past 2 years, and is running above 22%.
As the US has the highest level of incarceration of any country in the world and growing, and as most other countries are less than 1/4 of that, one could further argue that, provided a reasonable proportion of those in jail would be unemployed if they were not (I have no idea if this is true!) unemployment might even be a little higher.
Most European countries run at incarceration rates that are about 1/10 of those in America. When making a comparison perhaps some adjustment should be made.
The chart is from Bloomberg, I cannot find a longer one but the word is that it just hit a 25 year low. (see also previous blog under Baltic dry index). The highs and lows below the chart look odd simple because this particular way of presenting things was intended for stocks, not this index which is compiled once a day! This index has been very popular as a barometer of the wellbeing of the economies around the world as it tracks freight rates for 4 different classes of vessels on all the world’s major shipping routes. Unlike unemployment it is not easily manipulated, there are no seasonal adjustments, fictitious companies hiring or firing, or very convenient definitions. Late last year this index moved up briefly but then turned down again. This year it is down 62.5% and YoY 38.8%. Not good!!
At 9.35% year to date , the US represented by the DOW, is beaten only by Venezuela, no doubt thanks to this country’s president Chavez’s excellent stewardship.