What credit-card payoff? Consumers are dumping debt

[fltoo]

You can't include employed people in the unemployment rate. Even if it is only part-time, they are still employed. It would be deliberately misleading to count employed people as unemployed.

The previous posts have broken down how the survey results are used to come up with different percentages based on what the end user needs.

For all intents and purposes, the UE rate is under 10%. But, the FED, looking to allocate money to a state for retraining programs might use the percentage that includes part timers in need of full time work.

The media, depending how yellow it leans, will use the percentage that fits its viewing audience.

[WhatMoney]

The BLS has defined six different "unemployment rates", called U1 through U6. The "official" quoted rate is U3. I also quoted U5 and U6 in my prior post. It's hardly a new concept.

The problem I have with U3 is that if you stop looking for work for just a month, after many months of trying, you are called a discouraged worker and are no longer counted as part of the available work force. Therefore you are not counted as unemployed in the U3 "official rate". U4 or U5 are better measures of actual unemployment than U3, but of course it is a higher number - and politicians in power don't like quoting the higher and more realistic unemployment numbers.

Alternative measures of labor underutilization (unemployment)

U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force

U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force

U-3 Total unemployed persons, as a percent of the civilian labor force (the official unemployment rate)

U-4 Total unemployed persons plus discouraged workers, as a percent of the civilian labor force plus discouraged workers

U-5 Total unemployed persons, plus discouraged workers, plus all other “marginally attached” workers, as a percent of the civilian labor force plus all “marginally attached” workers

U-6 Total unemployed persons, plus all “marginally attached” workers, plus all persons employed part time for economic reasons, as a percent of the civilian labor force plus all “marginally attached” workers


Just look at how broad the definition of employed is in the BLS numbers, and how restrictive their definition of unemployed is for U3:

NOTE: The civilian labor force is the sum of the employed plus the unemployed. The employed are all persons who, during the reference week, a) did any work at all as paid employees, worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of their family, and b) all those who were not working but who had jobs or businesses from which they were temporarily absent. The unemployed are a) persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find work sometime during the 4-week period ending with the reference week, and b) persons who were waiting to be recalled to a job from which they had been laid off, regardless of whether they have been looking for work.

http://www.bls.gov/opub/ils/pdf/opbils67.pdf





http://www.pollster.com/blogs/about_...employment.php

[Flamingo]

Also, states are reporting to the media that they are basing their state unemployment rates on the number of claims filed for a certain period and do not count those that are still unemployed and not collecting unemployment. Folks that collect all their allotted weekly payments and drop off cannot be tracked after benefits are gone and who knows when/if they can get employment. We all know folks who were gainfully employed prevoiusly and who have been unemployed for a year or more because there is just nothing out there for them unless they find a part-time job somewhere. People may be confusing what the states are announcing with how the governmenet is reporting. But in the end, we all know how bad it is out there and the government really doesn't want us to know how bad - they want the consumer to start spending again as quickly as possible.

[WhatMoney]

Also, states are reporting to the media that they are basing their state unemployment rates on the number of claims filed for a certain period and do not count those that are still unemployed and not collecting unemployment. Folks that collect all their allotted weekly payments and drop off cannot be tracked after benefits are gone and who knows when/if they can get employment. We all know folks who were gainfully employed previously and who have been unemployed for a year or more because there is just nothing out there for them unless they find a part-time job somewhere. People may be confusing what the states are announcing with how the government is reporting. But in the end, we all know how bad it is out there and the government really doesn't want us to know how bad - they want the consumer to start spending again as quickly as possible.

First, the national U1 through U6 numbers ONLY are derived from the CPS population survey. Unemployment insurance claim data is NOT used.

The State unemployment rates from the BLS are more complicated - one of the several components for state unemployment numbers is the unemployment insurance (UI) claims, but the rate calculation also uses other data. This is how the BLS explains the LAUS (Local Area Unemployment Statistics):

The concepts and definitions underlying LAUS data come from the Current Population Survey (CPS), the household survey that is the official measure of the labor force for the nation. State monthly model estimates are controlled in "real time" to sum to national monthly labor force estimates from the CPS. These models combine current and historical data from the CPS, the Current Employment Statistics (CES) program, and State unemployment insurance (UI) systems.

http://www.bls.gov/lau/lauov.htm

In addition, the BLS now provides U1 through U6 unemployment rates for each state. This is a new service the BLS only started in 2008. You can get more information about the alternative LAUS numbers here:

http://www.bls.gov/lau/stalt.htm

Note the U6 unemployment rates for California, Michigan, and Oregon for 2009 were 21.1%, 21.5%, and 20.7% respectively. And these rates do NOT include underemployed workers. Oregon has a large group of underemployed workers - I'd say 1/3 of the employed workforce are underemployed up here. College graduates bagging groceries or taking a night watchman job is common.

The next report will come out March 19, 2010.

Unemployment by State: http://data.bls.gov/map/servlet/map....ate&seasonal=u

One thing for certain - collecting and compiling all these statistics keeps thousands of BLS employees employed.

[fltoo]

"One thing for certain - collecting and compiling all these statistics keeps thousands of BLS employees employed."

LOL true, and there are millions of Federal dollars at stake for the states based on the state UE figures.

States base their unemployment records on the same survey that the Fed does. They do NOT base the number solely on unemployment claims. As the Bureau of Labor states, it is not a productive way of arriving at the number of unemployed. Statistical analysis of the survey is.

There is no government conspiracy trying to "hide" how bad unemployment is.
It is bad, we all get it.

Our economy is bad enough without people "just adding 8% to or doubling" the unemployment number in statistical analysis because they think the percentage is wrong. That is ludicrous.

There are many good economic calendars on the web where you can follow economic trends. I have my favorite but don't want to mention the site. Just google "economic calendar" and then click on the little boxes and it will give you a graph of unemployment, the housing market, the dollar, etc. Most trends are on a roller coaster right now and there are concrete reasons why.

The worse thing you can do is to get info from the media. They play to their target audience.

Whatmoney, wonder if we use the same EC if you do indeed use one.

[WhatMoney]

Whatmoney, wonder if we use the same EC if you do indeed use one.

Always possible fltoo. I still use Briefing.com EC and Barron's Calendar, as they are both free now. But I wouldn't want to advertise anyone that requires a paid subscription. Here's another unemployment chart I like:

[banca rotta]

What is scarey to me is who pays for all of that dumped debt? In the long run, we all do with increased taxes, fees, service charges, higher prices, etc., etc.

I also laugh when they state the unemployment rate is at a certain percentage; all those off the unemployment roles who cannot receive any more benefits and are still unemployed are not counted so add about another 8% to the figure given.

Exactly! Anyone that thinks this problem can just go away just like that is just not paying attention (or very dumb)

All through out history anytime a govt or a kingdom, empire, etc. Did exactly what we are doing now by socializing all the banks losses they always end up the same way and that's hyperinflation. Never once in human history was there a soft landing to this problem.

They should have just let them all fail and get the pain over with as opposed to the horror that's coming.

Whether you like Glen Beck or not you should search for an episode he did last year and the expert explained that unlike the subprime and credit card melt down which was orderly the next asset bubble won't go like the other bubbles.

They will just "flame out" so fast there's nothing that can stop it.

[flyinbroke]

For some reason, the government convinced the masses and everyone else that bailing out the Big Six banks was a good move. They then said "lookee lookee, life is good, people are paying down their debts, the banks are profitable again" without checking with the banks on why the debts are going down. THen again, they never bothered accounting for a dime of the TARP funds either so this is no shock.

The banks would rather charge off because it increases their money by taking away tax liability. They can sue, but this costs money and does not guarantee any payout. They don't have to pay taxes on the chargeoffs anymore, they thus make more, they pass out bigger bonuses, life is good. Yes it does increase costs for everyone else, but when has it ever NOT been increased? I was getting ratejacked in the boom years, with perfect credit. Thus I ditched the Big Six banks.

Meanwhile the govt is still on its snowjob mission of telling everyone that Life is Good, unemployment is going down, debt is getting paid off, so spend spend spend. Most people with half a brain know better. We are not done crashing yet.

[fltoo]

Bubbles come and go.

The real threat to the USA is China. Although highly unlikely, I hope!, if China decides to screw us and flood the market with our dollar, we are done.

It is not in China's best interest to do this, but the threat is enough that we kow tow to China.

The US used this tactic against Britian regarding the Suez Canal. They were indebted to us enough that we threatened to flood the market with the pound if they did not cooperate and release the Canal. (a lot more to it, but that was the crux of it.)

It is like owing the in laws money and having to do whatever they say due to the financial indebtedness.

We need to stop borrowing money and pay off our debt.

[blockhead]

I love lectures from the bailed out banks

Talking of China see

http://www.nytimes.com/2010/03/18/business/global/18research.html?hp

Not much point in getting into debt to be an engineer when US companies are relocating to China and hiring engineers for $700 a month