Central Perk

sâmbătă, 3 decembrie 2011

Mish's Global Economic Trend Analysis

Cain Throws in the Towel; Gingrich's Serial Hypocrisy is Embarrassment to Republican Party; Ludicrous GOP Get-Tough Talk; Time for Romney and Gingrich to Step Aside as Well

Posted: 03 Dec 2011 04:17 PM PST

Herman Cain has "Suspends Presidential Campaign" which is a polite way of saying "I Quit".

Republican Herman Cain suspended his campaign Saturday, saying that allegations of sexual harassment in the workplace and an extramarital affair have "sidetracked and distracted" a run for the White House.

The accusations of personal misconduct, which he repeatedly denied, "had a tremendous painful price on my family," he said.

But while he added that he has "made mistakes," Cain insisted he's "at peace" with his God, himself and his wife, who was on stage at the event.

Newt Gingrich, who has recently emerged as the current leader in some polls, lauded Cain for "for having the courage to run and for having the courage to have big ideas," Newsday reports.

The former Speaker of the House added that he "appreciates why under the current circumstances, he decided to go back to being a private citizen."

Newt Gingrich: Serial Hypocrisy

Given the steady beat of Gingrichs's hypocrisy, Newt should throw in the towel as well. Please play the following short video.

Gingrich Willing to Lobby for Anything for a Price

The New York Times reports Gingrich Gave Push to Clients, Not Just Ideas

Newt Gingrich is adamant that he is not a lobbyist, but rather a visionary who traffics in ideas, not influence. But in the eight years since he started his health care consultancy, he has made millions of dollars while helping companies promote their services and gain access to state and federal officials.

Ludicrous GOP Get-Tough Talk

Peggy Noonan at the Wall Street Journal writes discusses the A Kettle of Hawks

We have a projected deficit over the next 10 years of $44 trillion. A group of Democrats and Republicans on Capitol Hill were charged with coming up with $1.2 trillion in cuts. Just 1.2 out of 44. Not that hard. And they couldn't do it.

To the Republicans, who met in debate Tuesday night in Washington. A note on the presentation of the debate itself. The videos each cable outfit now makes to introduce each debate have taken on a weird, hyperventilating tone. Tuesday's theme-setter included bombs dropping, jets roaring, presidents sweating, machine guns, screaming dictators, explosions and street demonstrators. Then, in urgent and dramatic tones: "The Republican National Security Debate begins—now." Guys, get a grip. Republican National Committee, start asking to OK the videos beforehand. This is a major-party nomination for the presidency, not a trailer for "Homeland."

Here are just a few phrases and sentences that were lobbed about for two hours. "Protect ourselves from those who, if they could, would not just kill us individually but would take out entire cities," "expanded drone campaign," "they can't be trusted," "strong special forces presence," "hot pursuit," "slapped new sanctions," "no-fly zone over Syria," "nuclear weapon in one American city," "break the Iranian regime," "sabotaging the oil refinery," "crippling sanctions," "centrifuges spinning," "covert actions within Syria to get regime change," there is an "imminent threat" in Latin America, "we have been attacked," "doctrine of appeasement."

At one point Wolf Blitzer asked Newt Gingrich: "Would you, if you were president of the United States, bomb Iran's nuclear facilities to prevent it from becoming a nuclear power?"

Messrs. Blitzer and Gingrich, longtime Washington insiders, live in a cultural cosmos in which things like this are chattered about with no more sense of import than if they were talking about the Redskins. In fact it's exactly what they talk about after they talk about the Redskins game. But should we be discussing those things so blithely and explicitly in such a public way? You have to wonder what the world thinks when it hears such talk—and the world is watching.

It would have been nice to hear one of the candidates say, "You know, Wolf, I'm not sure it's a good idea to talk the way we're talking at a time like this, with the world so hot and our problems so big. Discretion isn't cowardice, so let me give you the general and overarching philosophy with which I'd approach these challenges, and you can infer from it what you like. I prefer peaceable solutions when they are possible. I think war is always a tragedy, sometimes necessary, sometimes even inevitable, but always tragic, and so I don't speak lightly or blithely of taking up arms . . ."

By the end, some of what was said sounded so dramatic that Ron Paul seemed like the normal one. He very much doesn't want new wars or new military actions. This is not an unreasonable desire! Jon Huntsman was normal too. They both seemed to think our biggest foreign-policy challenge is the American economy, which pays for our arms and diplomacy but has grown weak. It has to be made stronger, because without it we can afford nothing.

The tone of the debate seemed to me another example of the perils of Republo-world, where politicians, consultants and policy professionals egg each other on in hopes of reaching the farthest points of the base.

On Foreign Policy, Ron Paul Is More Mainstream Than His Opponents

The Atlantic reports On Foreign Policy, Ron Paul Is More Mainstream Than His Opponents

In Peggy Noonan's latest column, discussed here by my colleague James Fallows, the Wall Street Journal columnist responds to the most recent GOP foreign policy debate by remarking on its bellicosity. "By the end, some of what was said sounded so dramatic that Ron Paul seemed like the normal one," she wrote. "He very much doesn't want new wars or new military actions. This is not an unreasonable desire!"

It's good to see an establishment columnist coming around to Paul's foreign-policy thinking, even if it's hedged in the condescending frame of they're so crazy they make even Ron Paul sound reasonable. Perhaps she'll go even farther in a future column if presented with evidence that Paul doesn't just "seem" like a normal candidate on foreign affairs, he is a normal candidate.

Remember when Paul belonged to the minority in Congress that opposed the Iraq War? Now, 62 percent of Americans say fighting the Iraq war was a mistake. You know the Republicans who criticized President Obama for presiding over the end of America's military presence in Iraq? Well, like Paul (and unlike Obama) 78 percent of Americans support full withdrawal. And in Afghanistan, another country that Paul wants to leave, two thirds of Americans want to see troop levels reduced. "Just one in three Americans believe fighting there is the right thing for the U.S. to do," CBS News found, "while 57 percent think the U.S. should not be involved in Afghanistan."

Like Ron Paul, Americans are also overwhelmingly against bombing Iran's nuclear infrastructure. And although I'll bet he wants to cut the Pentagon budget more than the average American does, a majority of the public prefers defense cuts to other kinds, and as Rasmussen found earlier this year, "Nearly one-half of Americans now think the United States can make major cuts in defense spending without putting the country in danger. They believe even more strongly that there's no risk in cutting way back on what America spends to defend other countries."

Comparing Paul's positions to those of either the American people or foreign-affairs experts in the State Department and academia, it is clear that his views are closer to normal than most of his Republican opponents' (that is to say, closer to normal than everyone but Jon Huntsman). On the biggest, most consequential foreign policy issues, he is averse to war, as are his countrymen. It is only when they are compared to the views of the Washington establishment, where the Washington Post op-ed page, the Weekly Standard, and the American Enterprise Institute are regarded as mainstream institutions, that Paul's foreign-policy views seem like the abnormal ones.

Romney is another war mongering fool and his trade policy positions will be as disastrous as the Smoot-Hawley tariffs were in the Great Depression.

I commend Cain throwing in the towel. Newt Gingrich needs to do the same because he is a hypocrite. Mitt Romney also need to do the same given that President Obama and Mitt Romney are Nearly One and the Same!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

German Finance Minister Hatches "National Redemption Fund" Scheme to Kick the Debt-Can Another 20 Years

Posted: 03 Dec 2011 08:53 AM PST

Finance Minister Wolfgang Schaeuble hatched a plan to siphon off a huge chunk of sovereign debt for every country in the EU and pretend to do something about it, not now of course, but over the next 20 years.

Allegedly the siphoned off debt would be paid back via a "National Redemption Fund".

Of course the only way to pay that debt back is by raising taxes or cutting spending for 20 years which means it has a snowball's chance in hell of actually working.

Reuters discusses the 20-year can kicking idea in German finance minister details debt fund plan before EU summit

Wolfgang Schaeuble outlined his plans under which states would effectively siphon off a chunk of their debt to a special national fund and pay it off over about 20 years while committing to reforms to keep debt levels on target.

Schaeuble believes his proposal, which has won qualified support from Chancellor Angela Merkel, would boost confidence as states would be sending a signal they were serious about limiting debt levels to 60 percent of gross domestic product.

"We need a redemption fund in every single country of the euro zone," Schaeuble told the Passauer Neue Presse.

"Each of these countries should put into a special fund that part of its debt which exceed 60 percent of its GDP, and should pay that off with tax revenues. Over a period of 20 years, the debt should be reduced to 60 percent," he said.

In Germany's case, the fund - covering federal, state and municipal debts - would amount to about 500 billion euros ($672 billion) as German debt is around 80 percent of its gross domestic product, said Schaeuble.

Merkel's spokesman welcomed Schaeuble's proposal as "interesting," saying it could help rebuild investor confidence.

Just One Catch

Schaeuble's plan has already hit opposition from Austria. Finance Minister Maria Fekter said on Friday any proposals that resulted in gathering billions of euros from taxpayers would encounter problems in national parliaments.

Duh? Ya think?

Bear in mind the idea is progressively harder for countries already under extreme difficulty with various austerity measures imposed to pay back French and German banks.

This is another one of those dead-on-arrival ideas that might even be agreed upon, but will never succeed.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Damn Cool Pics

Black Friday Shopping Prank

Posted: 02 Dec 2011 11:21 PM PST

Two guys write weird and funny shopping lists for each other and then goes into a store to try to get those items, without having any idea what's actually on the list.

Weekly Address: Extending and Expanding the Payroll Tax Cut

Your Daily Snapshot for
Saturday, December 3, 2011

Weekly Address: Extending and Expanding the Payroll Tax Cut

President Obama calls on Congress to extend and expand the payroll tax cut -- to protect middle class families and ensure that the economy continues to grow.

Watch the video:

President Obama tapes the Weekly Address in the Map Room of the White House, Dec. 2, 2011. (Official White House photo by Check Kennedy)

Weekly Wrap Up

Payroll Tax Cut On Wednesday President Obama spoke in Scranton, Pennsylvania urging Congress to extend a tax break for middle class families. Yesterday Congress rejected an extension of this payroll tax cut that is set to expire at the end of the month. Because of this failed attempt to extend tax cuts, the typical middle-class family is going to see their taxes go up by $1,000 in 2012. The President released a statement calling the vote “unacceptable” -- and urging Congress to stop playing politics.

White House Holidays The trees are lit and the ornaments are out. The First Lady welcomed military families to the White House Wednesday for a preview of this year’s holiday decorations. This year’s White House Holiday theme “Shine.Give.Share” celebrates the countless way we can lift up those around us and share our blessings with all. Mrs. Obama’s guests saw the 18-foot official White House Christmas tree in the Blue Room that honors our military, the Gold Star tree in the East Landing plus a series of topiaries built in the image of the First Dog, Bo. On Thursday, the First Family welcomed hundreds to the National Tree Lighting Ceremony to bring in holiday cheer with guest performances including a reading of “the Night Before Christmas” by the First Lady and Kermit the Frog.

Green Building Initiative President Obama was joined by former President Bill Clinton on Friday as he announced the next piece of his “We Can’t Wait” initiative—a $4 billion investment in improving energy efficiency in buildings across the country.ThePresident has also directed all Federal agencies to make at least $2 billion worth of energy efficiency upgrades over the next two months.

World AIDS Day To mark World Aids Day on Thursday, the President spoke about the progress made in the fight against the disease worldwide. He was joined via satellite by former Presidents George Bush and Bill Clinton, while Bono, Alicia Keys and others were on hand to make a new commitment to help extend the progress made in the fight against this global pandemic. The commitment plans to help 6 million people get treatment by the end of 2013, 2 million more than the original goal.

EU Summit President Obama met with a group of senior officials from the European Union Wednesday to help find a solution to the Eurozone Crisis. The leaders issued a joint statement describing their shared commitment to create jobs and ensure financial stability. Later in the week, he met with Dutch Prime Minister Mark Rutte to discuss his government’s commitment to keeping the euro intact.

West Wing Week: Check out your video guide to everything that happened at 1600 Pennsylvania Avenue. This week we're featuring special clips from the President's Asia Pacific trip.

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Seth's Blog : The erosion in the paid media pyramid

The erosion in the paid media pyramid

Since the invention of media (the book, the record, the movie...), there's been a pyramid of value and pricing delivered by those that create it:

Starting from the bottom:

Free content is delivered to anyone who is willing to consume it, usually as a way of engaging attention and leading to sales of content down the road. This is the movie trailer, the guest on Oprah, the free chapter, the tweets highlighting big ideas.

Mass content is the inevitable result of a medium where the cost of making copies is inexpensive. So you get books for $20, movie tickets for $8 and newspapers for pocket change. Mass content has been the engine of popular culture for a century.

Limited content is something rare, and thus more expensive. It's the ticket that everyone can't possibly buy. This is a seat in a Broadway theater, attendance at a small seminar or a signed lithograph.

And finally, there's bespoke content. This is the truly expensive, truly limited performance. A unique painting, or hiring a singer to appear at an event.

Three things just happened:

A. Almost anyone can now publish almost anything. You can publish a book with out a publisher, record a song without a label, host a seminar without a seminar company, sell your art without a gallery. This leads to an explosion of choice. (Or from the point of view of the media producer, an explosion of clutter and competition).

B. Because of A, attention is worth more than ever before. The single gating factor for almost all success in media is, "do people know enough about it to choose to buy something?"

C. The marginal cost of one more copy in the digital world is precisely zero. One more viewer on YouTube, one more listener to your MP3, one more blog reader--they cost the producer nothing to produce or deliver.

As a result of these three factors, there's a huge sucking sound, and that's the erosion of mass as part of the media model. Fewer people buying movie tickets and hardcover books, more people engaging in free media.

Overlooked in all the handwringing is a rise in the willingness of some consumers (true fans) to move up the pyramid and engage in limited works. Is this enough to replace the money that's not being spent on mass? Of course not. But no one said it was fair.

By head count, just about everyone who works in the media industry is in the business of formalizing, reproducing, distributing, marketing and selling copies of the original creative work to the masses. The creators aren't going to go away--they have no choice but to create. The infrastructure around monetizing work that used to have a marginal cost but no longer does is in for a radical shift, though.

Media projects of the future will be cheaper to build, faster to market, less staffed with expensive marketers and more focused on creating free media that earns enough attention to pay for itself with limited patronage.

• Email to a friend •

vineri, 2 decembrie 2011

Mish's Global Economic Trend Analysis

Bobo’s Travels - Plenty of Job Offers for Skilled Engineers IF You Can be Like Bobo
Charts of the Day: Labor Force and Unemployment Rate Adjusted for Population Growth Since 1948 Show Falling Unemployment Rate is "Statistical Mirage"
Unemployment Rate Dips to 8.6% as 487,000 Drop Out of Labor Force

Bobo’s Travels - Plenty of Job Offers for Skilled Engineers IF You Can be Like Bobo

Posted: 02 Dec 2011 04:34 PM PST

I received an interesting email today from a reader "Freemon" regarding the trials and tribulations of his engineer on the move friend "Bobo".

"Freemon" writes ...

The following is an email I received from a fellow engineer. It pretty much summarizes the times.

My Florida nuclear power plant work ended sooner than promised, so I networked my contacts and in 6 working days landed 2 solid offers. Yep, it's moving time again.

I'm flying to Vancouver CA to work for 3 weeks, then flying back to Florida to move my stuff to AZ. I'm driving my truck the southern route - New Orleans, San Antonio River Walk and Alamo, Austin City Limits, etc. Should be in Phoenix the last few days of 2011, which gives me just enough time for a round of golf and a hike up Squaw Peak. Then I'm going to Nevada for my next job building a new gold mine.

Let's see, that makes 4 states, 3 companies, 2 countries, and 5 different job-sites for me in the past 11 months. Pack-and-move and pack-and-move and pack-and-move. My world is spinning faster and faster and I can barely hold on anymore. I've rented my house, sold all my furniture, dumped my camping gear, and given away my t-shirts, and now I live out of cardboard boxes.

Anything I buy is too much trouble to drag around. I have simplified so much that all I own anymore is a cell phone, a laptop, and an email address. Travel light, move fast, and stay alive. There's no middle ground anymore.

There are thousands of starving engineers, spun out into a ditch, unable to make that next move, meet that upcoming deadline, or attend tomorrow's meeting. So I travel light and move fast. Very fast. Always faster than the last time. Always faster than the next guy. Always jumping higher and farther and better than ever before. One day I'll just burn up, spin out, or perhaps just give up. But not just yet. Somehow, somehow still, I keep missing career death with that one well-placed contact. With that one quick jump, with that one flexible move, lucky me, I just survived another crash.

And, extra lucky me this time — the nukies downsized me in November but paid me thru January, and by next week I'll be polishing gold nuggets in my hotel room in Vancouver. Double-dipping sweet!

So tonight I'm heading to Wal-Mart to buy a trench coat with deep pockets, extra sunglasses, and a 10 gallon hat. While you are sitting in your cubicle smothered in paperclips and yellow stickies, I'll be surrounded with tons of gold! I'm sure they won't miss an ounce or two every now and then.

And, so I spin, faster and faster, around the world. Where it stops nobody knows. It's either spin or spin out in this business anymore.

Another job, another state, another company, another promise, another airplane flight, another hotel. What day of the week is it? Sorry, I don't have a clue.

All I care about now is that this new job is good. I work 6 weeks on and get 2 weeks off. Free airplane, hotel, food, car, etc. They pay for everything. Even overtime. See you on Squaw Peak every day for 2 weeks about mid-February. Or perhaps Hawaii, Mexico, or wherever the plane lands next.

It looks like I'll be living in hotels until the sky caves in, so if anyone needs any towels, shampoos, or soaps, just let me know.

Hey, Freemon, you can certainly understand. What a fast unstable world! You can do anything you want with this letter, but please change everything that identifies me with it. Thousands of engineers like us are stuck in this spin, and the corporate spin of "America needs more engineers, blah blah blah"

We have thousands of engineers too many. We need a stable economy!

That is a slightly edited version (corrected grammatically only) of a version on Freemon's website Market Place of Ideas website Bobo's Travels

I cannot confirm the accuracy of the post, but to me it rings true.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Charts of the Day: Labor Force and Unemployment Rate Adjusted for Population Growth Since 1948 Show Falling Unemployment Rate is "Statistical Mirage"

Posted: 02 Dec 2011 09:53 AM PST

In Unemployment Rate Dips to 8.6% as 487,000 Drop Out of Labor Force I presented some quick facts on the drop in the unemployment rate.

In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.
In November, those "Not in Labor Force" rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed.
Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Labor Force and Unemployment Rate Adjusted for Population Growth

Reader Tim Wallace responded with a very nice set of graphs and commentary. Wallace writes ...

In the entire history of the labor force data, only in 1951, 1961, 1964, and 2009 did the labor force "shrink". It also "shrank" in 2011 off 2010. Also note that from 1964 to 2007, only in 1991 at 631,000, 1995 at 723,000 and 2002 at 801,000 did the labor force fail to add more than 1,000,000 people.

However, in 2008 the labor force only expanded by 776,000. This was followed by a loss of 826,000 in 2009, a trivial gain of 155,000 in 2010 and a loss of 67,000 in 2011.

If you look at the average labor force growth from 1948 to 2007 of 1,579,000 the labor force should have expanded by 6,316,000 2008-2011. Instead the labor force expanded by a mere 38,000!

Thus, 6,278,000 people are unaccounted for in the unemployment numbers based on historical averages.

The final graph takes the adjusted data and calculates the unemployment number off the adjusted workforce and those that actually have jobs. The unemployment numbers using this historical trend method show the following numbers for November in these years:

Unemployment Rate Adjusted for Population Growth

2007 4.7%
2008 7.3%
2009 11.7%
2010 12.4%
2011 12.2%

I am sure it is just coincidence, but it is interesting to note that the flat lining of the labor force began in earnest with the Obama administration.

Tim

Thanks Tim!

click on any chart for sharper image

Labor Force Seasonally Adjusted 1948 to Present

Labor Force Seasonally Adjusted 1948 to Present
Years 2008-2011 Adjusted to Historic Growth

Unemployment Rate Adjusted for Normal Labor Force Growth 1948 to Present

Due to boom demographics, a slowing rate of increase in the labor force was to be expected. Instead the bottom has fallen out for 3 years.

Conclusion

Those who think the economy is improving based on the falling unemployment rate are looking at a statistical mirage based on an extremely atypical and prolonged drop in the labor force.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Unemployment Rate Dips to 8.6% as 487,000 Drop Out of Labor Force

Posted: 02 Dec 2011 08:18 AM PST

Quick notes about the "falling" unemployment rate:

In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.
In November, those "Not in Labor Force" rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed.
Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Jobs Report at a Glance

Here is an overview of November Jobs Report, today's release.

US Payrolls +120,000
US Unemployment Rate Declined .4 to 8.6%
Civilian labor force fell by 315,000
Those Not in Labor Force rose by 487,000
Participation Rate fell .2 percentage points to 64.0%, nearly matching a low last seen in 1984
Actual number of Employed (by Household Survey) rose by 278,000
Unemployment fell by 594,000
Civilian population rose by 172,000
Average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours for the second consecutive month.
The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down 0.1 hour to 33.6 hours in November.
Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18
Government employment decreased by 20,000
The private sector has only recovered 33 percent of jobs lost in the peak-to-trough period of January 2008 to February 2010.

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

For the second month the labor force rose. This is a welcome sign. However, were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.

November 2011 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) November 2011 Employment Report.

The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. Government employment continued to trend down.

Unemployment Rate - Seasonally Adjusted

Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted

Notice that actual employment is lower than it was nearly 11 years ago.

Nonfarm Employment - Payroll Survey - Monthly Look - Seasonally Adjusted

click on chart for sharper image

Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs.

In the last year of the weakest recovery on record, 2.5 years old, the economy averaged about 131,000 jobs a month.

Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat.

Nonfarm Employment - Payroll Survey Details - Seasonally Adjusted

Average Weekly Hours

Index of Aggregate Weekly Hours

Average Hourly Earnings vs. CPI

"Success" of QE2 and Operation Twist

Over the past year, average hourly earnings of all employees have increased by 1.8 percent. The consumer price index for all urban consumers (CPI-U) was up 3.6 percent from October 2010 to October 2011.
Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18 in November after increasing 12 cents over the prior 2 months.
Not only are wages rising slower than the CPI, there is also a concern as to how those wage gains are distributed.

BLS Birth-Death Model Black Box

The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.

The BLS has moved to quarterly rather than annual adjustments to smooth out the numbers.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth Death Model Adjustments For 2011

Birth-Death Notes

Do NOT subtract the Birth-Death number from the reported headline number. That is statistically invalid.

It is exceptionally rare to see negative numbers in birth-death adjustments in months other than January and July. Data for much of this year actually seems reasonable.

Household Survey Data

click on chart for sharper image

In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.

Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Table A-8 Part Time Status

click on chart for sharper image

Part-time status is essentially right where it was a year ago.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

click on chart for sharper image

Distorted Statistics

Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers. Digging under the surface, the drop in the unemployment rate is nothing but a statistical mirage.

The official unemployment rate is 8.6%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

While the "official" unemployment rate is an unacceptable 8.6%, U-6 is much higher at 15.6%.

Falling unemployment rate would normally be considered a good thing, but not if it is happening because 1,793,000 people stopped looking for work.

Things are much worse than the reported numbers would have you believe. The entire economic picture is on very thin ice given the clear slowdown in the global economy.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

sâmbătă, 3 decembrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Weekly Address: Extending and Expanding the Payroll Tax Cut

Seth's Blog : The erosion in the paid media pyramid

The erosion in the paid media pyramid

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vineri, 2 decembrie 2011

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Mish's Global Economic Trend Analysis

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