|
"Real" Unemployment
Rate:
25.6% - 1933
20.0%
- 1938
19.3% - Nov/Dec 1982 (post
WWII high)
17.2%
- Oct/2009 (Great Recession high)
~ ~ ~
16.0%
Oct/2011
15.6% Nov/2011
15.2% December 2011 |
USA "Real" Unemployment Rate
drops to 15.2% in December
April 6 2012 delayed
FreeVenue public release of Jan 6th MemberVenue guidance ~ Today's
headline USA Unemployment Rate for December may be 8.5% (U-3),
but the dire state of the jobless is better reflected by the REAL
Unemployment Rate
of 15.2%. The latter includes discouraged/marginally
attached workers and economically necessitated part-timers.
The rate is down from 15.6% in November, but is not significantly
below the Great Recession induced high of 17.2%
set Oct/2009.
How is it that GDP has
again surpassed the pre-Great Recession levels while 6 million souls
are still not working? A low USDollar has spurred Exports to
record levels and manufacturing is much less labour intensive than
the decimated construction sector.
This jobless recovery
was foretold by Trendlines Research in Autumn 2008. As some sectors move
to replenish, there is a visible increase in Aggregate Weekly Hours
... then overtime ... and finally re-hiring. The U-6
Unemployment Rate did not peak 'til 23 months after the trough of
the 2001 Recession. It never did get back to the
pre-contraction level of 6.8%. With the recent Recession
ending June 2009, it is little reported U-6 topped a mere four
months after the trough "this time".
On resumption of the
business cycle, folks commence to come back into the labour market
and the statistical U-3 universe expands. With a larger
denominator, it is common for the U-3 rate to rise temporarily,
masking the better times. With that paradox, the Real
Unemployment Rate (U-6) should be first to reveal the early
signs of an improved employment environment. As seen in the
chart, only the 1971 event mirrors the stubbornness of the currently
unfolding scenario.
Failure of the
Unemployment Rate to plunge post-Recession in both of the last
downturns provided McDoomers with lotsa ammunition for ad nauseum
calls for a double-dip or even a depression. That fate was skillfully
thwarted in both events via intervention by Congress & the Federal
Reserve. The economy made the transition from "Recovery" mode
to "Expansion" of the next business cycle upon the pre-Recession
2007 Real GDP high water mark finally being exceeded in Oct/2011.
The
TRENDLines Recession
Indicator
provides guidance on the status of the economic current cycle and
projected baseline GDP thru to 2035. Unfortunately, it appears
U-6 will stay stubbornly high, declining to 10.4% by Dec/2017.
The post WWII high for
this Bureau of Labour metric (U-6) is 19.3% in Nov/Dec 1982.
The all time record of 25.6% was set in 1933. By 1937 it had
corrected to 11%, but in a 1938 premature effort to rebalance the
Budget, suffered a relapse to 20%. |
|
 |
blast from the past
chart:
July 21 2010 ~ Due
to exorbitant gasoline and diesel prices at the pump, USA Car &
Light Truck sales collapsed in 1980, 1990 & 2007. On its
present trajectory, the same fuel cost/GDP ratio that initiated
these episodes of dramatic demand destruction will be revisited upon
$3.42/gallon gas ($92/barrel crude) ... probably in 2011Q1.
Ignoring the
Cash-for-Clunkers anomaly, annualized sales have climbed back to
as high as 11.8 million from 9.1 in Feb/2009. See our
Gas Pump
&&Barrel Meter
charts for lots more discussion on the real factor thrusting the USA
economy into double-dip. |
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