Friday, May 8, 2009

Real April Unemployment Rate Reaches 12.9%

The following data is only for information purposes and should not dissuade you from buying stocks hand over fist.

As I stated earlier I am not going to reinvent the wheel for unemployment data this month - the full monty for my conclusions can be found a month ago in [Apr 3, 2009: Real March Unemployment Rate Reaches 12.5%]

You can take all that data from that piece a month ago and just change the numbers as I will do below. From here on out as the federal government jobs start coming hot and heavy and the economy stabilizes I'd expect some months of 300K to 400K of job losses and then we'll improve to 100K to 200K a month later in the year. I predicted in 2008 we'd see a 10% "government reported" unemployment rate which would mean in real terms (how the government used to measure things before they realized we could not handle the truth) 15% unemployment rate by the time this is all said and done, and I stick to it.

One quick note - 66,000 new jobs this month were federal workers for the census bureau. Apparently nearly 1.5 million people will be doing this work in the coming year, so I guess if it were 2006 instead of 2009 we can lower the figures below by another 66,000 but at this point, any job is a good job!
  • The U.S. Census Bureau began hiring 140,000 temporary workers last month to start conducting the population count that happens once every 10 years. It will hire more than 1.4 million people over the next year.

539,000 jobs were lost ... excluding 66,000 census workers added, in a normal time this would of been well over 600,000 of losses. Previous months were revised downward to show another 66,000 of losses. As always we continue to create jobs in healthcare which is only adding to our massive Medicare obligations. Healthcare and government - America's two persistant job drivers.

As always, a reminder - if after a number of weeks you stop looking for work, you no longer are unemployed in America. At least in government statistics.

I will present March vs April's data - March in purple, April in green

Government presented unemployment rate 8.9% v 8.5%

(this is the most important number to me) The unemployment rate per my best estimation (should be very close) as presented pre early 1990s adjustment i.e. how the data was presented in the 80s, 70s, 60s et al. 12.9% v 12.5% . Again I stress if we were sitting here in 1983 they'd be reporting a figure near 13% unemployment - instead the powers that be will squack about how it's not as bad as the early 80s or late 70s. It is substantially worse already.

The broadest measure of unemployment and underemployment (people unable to find full time work or at jobs outside their field, et al) (U-6) jumped to 15.8% v 15.6%

For the first time I could remember 5,000 jobs were lost in the government sector in March, but we quickly fixed that by adding 72,000 government jobs in April (66,000 of them census takers)

Private sector job losses 611,000 in April v 693,000 in March (this is not as good as it looks once we see the birth / death situation below which explains the entire improvement)

Average work week remained constant in both months at 33.2 hours. And in a trend we've been pointing out (cut in many people's wages) average income gains fell from last month's 0.2% rate (2.4% annualized) to this month's 0.1%. (1.2% annualized)

The birth / death model which in an estimate of businesses too small to measure, so the government guesses - has been positive almost every month during this entire recession. :) Apparently thousands upon thousands of small business are sprouting across America creating a bevy of jobs. Government "created" on paper +226,000 jobs versus +114,000 last month via this adjustment.


For the full scoop, feel free to read through the entire entry from a month ago - basically this is a garbage in, garbage out report. Unless you believe a bevy of small business are creating new jobs all over the country - we are losing, in reality, 800K-900K jobs a month since Halloween. This will "improve" to 500-600K (reality) or so in the coming months, when the government reports 200-400K. And so on.

But as long as we all click our heels and believe, place heads firmly in sand... we can create whatever alternative reality we wish. And the Federal Reserve will take away all our risks - so let's buy stocks.

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