Author Topic: More news you wont see...on the news... (Read 685 times)

muckmaw · « **on:** October 09, 2003, 07:55:14 AM »

Unemployment figures out today...

The futures market lifts higher on the heels of the better-than-expected Initial Claims report, which indicated a 23K drop from last week to 382K (consensus 394K), bringing the 4-week average down from 405K to 393.5K, its lowest level since February.

miko2d · « **Reply #1 on:** October 09, 2003, 08:41:48 AM »

Are you saying that unemployment is dropping? How would you know by just the claims numbers?

The August report indicated that net 93,000 jobs were lost but the official unemployment dropped from 6.2% to 6.1% - which seems impossible.

It's just a trick of statistics. When people give up search for a job (being discouraged, switching to cash economy, accept forced retirement, etc.), they are removed from unemployed rolls.

Why don't you hold on to that data and come back to us with a good news when the number of jobs created actually exceeds the number of jobs lost.

miko

Mickey1992 · « **Reply #2 on:** October 09, 2003, 08:50:00 AM »

Yahoo and FoxNews.com both have the story on the front page.

Eventhough the drop in initial unemployment claims was less than 10%, I bet the markets will jump on the news.

Ripsnort · « **Reply #3 on:** October 09, 2003, 08:59:41 AM »

Quote

Originally posted by Mickey1992
Yahoo and FoxNews.com both have the story on the front page.

Eventhough the drop in initial unemployment claims was less than 10%, I bet the markets will jump on the news.

Its not going up currently because of the 1% futures reported, thats for sure.

Krusher · « **Reply #4 on:** October 09, 2003, 09:02:13 AM »

Quote

Originally posted by miko2d

It's just a trick of statistics. When people give up search for a job (being discouraged, switching to cash economy, accept forced retirement, etc.), they are removed from unemployed rolls.

In my 30 years of working or looking for a job I dont recall ever giving up. It seems odd that before this particular downturn the people who "quit looking for work" was never reported. I think this particular trick in statistics is very odd indeed.

Oh BTW if you switch to a cash economy are you out of work or just cheating the IRS?

Rude · « **Reply #5 on:** October 09, 2003, 09:19:00 AM »

Quote

Originally posted by miko2d
Are you saying that unemployment is dropping? How would you know by just the claims numbers?

The August report indicated that net 93,000 jobs were lost but the official unemployment dropped from 6.2% to 6.1% - which seems impossible.

It's just a trick of statistics. When people give up search for a job (being discouraged, switching to cash economy, accept forced retirement, etc.), they are removed from unemployed rolls.

Why don't you hold on to that data and come back to us with a good news when the number of jobs created actually exceeds the number of jobs lost.

miko

There is no good news....it's all bad

BB Gun · « **Reply #6 on:** October 09, 2003, 09:33:29 AM »

Every time there's an unemployment problem, the "how do you report it, what does it capture, who does it leave out?" mantra gets repeated.

No, its not perfect, but except for the way they changed reporting it a few dozen years ago (which I usually see normalized or accounted for in any long term comparisons) it at least is a self-consistent indicator. No, it doesn't tell the whole story, but it does show trends.

BB

miko2d · « **Reply #7 on:** October 09, 2003, 09:37:57 AM »

Krusher: It seems odd that before this particular downturn the people who "quit looking for work" was never reported.

It's not reported now. You have to do basic math to come up with it. 93,000 net jobs are lost in a month but the number of unemployment claims fell by 200,000 (that is not an actual number, I just do not remeber what 0.1% of US workforce is), assuming all 93,000 applied for unemployment (which is not usually the case), what happened with 107,000 who do not reclare themselves as looking for jobs but did not find employment in legal economy? Did we have extra 107,000 suddenly retire? Die of misterious cause? Emigrate?
There is little doubt that there is more unemployment than official labor statistics indicated – because these measure only those who apply for unemployment benefits and are actively seeking work.

How about going on disability instead of looking for a job? All you do is make a claim that is impossible to refute. The overwhelming numbers of disabilities claims come down to two essential sources: back trouble and mental disability. Who is to say you don’t have back trouble? Actually, does anyone over the age of 40 not have some form of back trouble? As for mental disability, there’s nothing like idle hands to create the illusion of grave mental trouble.

Disability benefit became the largest income-support program in the federal budget ($60 billion), larger than unemployment benefits or food stamps.

Oh BTW if you switch to a cash economy are you out of work or just cheating the IRS?

Legally, you are cheating the IRS. On the other hand, if you tried not to cheat the IRS, you would not be working anyway since the reported after-tax income would make work unprofitable. So the IRS would not be getting anything. Kind of like catch-22.

It's not just the minimum wage, employment and income taxes that make work unprofitable. A person declaring his wage can cause his wife/children lose public welfare/health insurance while not making enough to pay for the substitutes.

From the society's point of view, if a person is engaged in production, it's better than if he/she is idle.

miko

Sabre · « **Reply #8 on:** October 09, 2003, 09:59:12 AM »

Quote

For the first time in eight months, the economy actually added jobs in September — 57,000 of them — helping to keep the nation's unemployment rate at 6.1 percent, the government reported last week.

First, the losses in August were offset by the gains in jobs in September, as reported above. Second, while jobs may be eliminated, there are more jobs than there are people seeking them. Otherwise there would be no "Now Hiring" signs or adds anywhere, which there are. The new jobless claims are just that...the new ones. At the same time that new claims are made, other people who were already on the roles find jobs and are removed (a number obviously not reflected in the "new claims" number). Finally, Democrats in congress and out have been beating the Adminstration up for a bad economy using this very metric (it's the only negative economic indicator they have to play with right now). So now that it seems to be catching up with the rest of the growing economy (3.3 percent last quarter, with a projected 5.0 percent for the upcoming quarter), you berate it as meaningless. Make up your mind. That fact is, decreases in the new jobless claims is recognized universally as a good thing, a positive ecomonic indicator. While this metric alone cannot and should not be used as the sole measure of an improving economy, combined with the other positive indicators we have it points to a more optimistic outlook. The Dow Jones seems to agree, at least.

Repeat after me: "It's okay to be optimistic. It's okay to be optimistic. It's okay..." Try it, you'll like it!

miko2d · « **Reply #9 on:** October 09, 2003, 10:04:20 AM »

BB Gun: No, its not perfect, but except for the way they changed reporting it a few dozen years ago (which I usually see normalized or accounted for in any long term comparisons) it at least is a self-consistent indicator. No, it doesn't tell the whole story, but it does show trends.

Let's make a mental experiment. If you suddenly have ten million people out of work and no new jobs lost or created, what happens? As time goes on more and more of those 10 million despair of finding (legal) job and drop off the activaly-looking-for job list. Here is your trend - unemployment is steadily dropping!

This way any prolonged recession may cause an automatic drop in those fake unemployment statistics.

miko

midnight Target · « **Reply #10 on:** October 09, 2003, 10:14:17 AM »

We are starting to hire.

muckmaw · « **Reply #11 on:** October 09, 2003, 10:30:14 AM »

We're hiring...

as a matter of fact, my office is desperate for 2 trainees...

Anyone interested...

Matter of fact, new thread material...

miko2d · « **Reply #12 on:** October 09, 2003, 10:31:13 AM »

Sabre, Rude,

Drop off your politicising and just read what I said, rather then attribute to me things that I did not.

I have no idea whether unemployment uncreased or decreased. (Even if I did, there are complex economic reasons not to rejoyce at any increase of employment but only at that directed towards productive activities.)

All I am saying is that the common percentage statistic of unemployment - 6.1% in this case, has no direct link to the number of jobs created/lost and does not reflect reality. Not that it's skewed - just that it's meaningless. Some of that 6.1% are working and some outside that 6.1% are not working but would like to and nobody knows the real numbers.

The data is nonsense when it suggests drop in unemployment and it would be nonsense if it suggested increase in unemployment. Nonsense is nonsense whatever it is used to illustrate.

The economy lost 97,000 jobs in August and added 57,000 jobs in September. Those numbers are the closest to reality. I do not see how gain of 57,000 offsets the loss of 97,000 (let me guess, public school education?) but the trend is more significant
here. At least we stopped losing jobs and started creating them.

As for being optimistic, even while recognising the net job creation, I do not share your ignorance of economics, Sabre. A monetary-expansion caused boom will surely increase employment by misallocating capital towards resource-wasting projects that will fail when the lack of real funding catches up with us.
I would rather pay people welfare to do nothing than pay them welfare to waste resources.

In the previous Fed-induced boom cycle trilions of dollars worth of capital were created and wasted - like underground fiberoptic cable that lays unused. It's value now is zero because it is not productive. Labor and resources wasted on it's creation could have been used elsewhere.

Somehow I do not see the GDP for the 90s revised downward to account for the loss or employment adjusted to account only for productive workers. We still think there was a growth in GDP.

miko

Sabre · « **Reply #13 on:** October 09, 2003, 12:38:37 PM »

Ignorant? Taking it personal now? Hmm...sounds like you didn't bother to read or digest what I said. That's pretty ignorant of you. By the way, go back and read the original post, which talked about the "INITIAL ClAIMS" figures. Sounds like you either didn't read or didn't understand what this means. It means the number of people filing for unemployment benefits at the start of their unemployed stint. It is an accepted (by ecomonists, amoung others) economic indicator of overall unemployment, not an exact figure. There is no exact figure of who's employed and who isn't. Again, this is simply another indicator that the economy is improving (job growth always lags other indicators, particularly in the upward direction), and is consistant with a guarded optimism for continued economic growth. Please read this stuff before calling others ignorant. Thanks.

Krusher · « **Reply #14 on:** October 09, 2003, 02:28:28 PM »

Quote

Originally posted by miko2d

It's not reported now.

I just saw the same thing reported on ABC news.

BTW you could probably do a search of this BBS and find a dozen refrences to it alone.