Jobless Claims Would Have to Approach 1m to Reach the 1982 Level, As Percent of Labor Force
I've posted about this before, the fact that the reported weekly jobless claims numbers are not adjusted for the size of the labor force. For the month of February, weekly initial unemployment claims averaged 627,875. As a percent of the civilian labor force, those jobless claims represent 0.4071% of the 154.214 million labor force.The chart above shows the "initial jobless claims as a percent of the labor force" back to January 1980. To reach the same level as the peak in 1982 of 0.6067%, today's jobless claims would have to be almost 936,000, or almost 50% higher than the current 628,000.
So how about we first get hysterical for awhile about the "worst economy since 1982" before we go totally hyperbolic about the "worst economy since the Great Depression." Once we reach the 936,000 jobless claims it would take to equal the economic conditions of 1982, then let's start talking about Great Depression II, but not before.
Related: I was at the Great Lakes Crossing Mall yesterday in Auburn Hills (suburb of Detroit), and it seemed just like Christmas: the parking lot was full of cars, the stores were full of shoppers, the food court was full, people were lined up to buy movie tickets, etc. And this shopping activity was taking place in the state with the highest unemployment rate in the country (11.6%)!
Bottom Line: The long checkout lines at a busy mall in Michigan on a Saturday afternoon during "Great Depression II" are a far cry from the long breadlines of "Great Depression I" in the 1930s.
13 Comments:
You mean some of the journalistic commentary is a little overwrought?Surely you jest.
China ‘Worried’ About Safety of U.S. Investments, Wen Says
March 13 (Bloomberg) -- China wants the U.S. government to “ensure the safety” of its investments in the world’s largest economy, Premier Wen Jiabao said.
“We have lent a huge amount of money to the United States,” Wen said today at a press conference in Beijing that marked the closure of the annual National People’s Congress meeting. “Of course we are concerned about the safety of our assets. To be honest, I am a little bit worried.”
My comment: China should be worried. Obama will waste trillions of dollars, and has bragged about a long-term L-shaped recovery!
Cartoon of the (Lost) Decade
Frame one: Fat guy with cigar sitting in SUV with "U.S. Consumer" across the side says to a guy who looks like Obama: "It needs a tune-up."
Frame two: Fat guy cramped into a small go-cart and Obama says: "It's all fixed now."
I think one of the people you saw at the mall must be my neighbor that can't keep current on his house payment, but can still go buy a couple of iPhones for himself and his wife. Maybe it was one of my friends that just bought a new Jeep, but is leaving for Texas, because the plant here in Michigan is idled. Maybe it was my neighbor that just saw their pay decreased by $700 a month, but is still going on a family vacation to Florida in a week. Maybe it was my friend that just claimed bankruptcy, but is preparing to go on a cruise. Maybe it was ME you saw trying to get a job at the pretzel shop, since I can't find an IT position to save my life! Maybe they're all there buying suitcases so they can get out of this crummy state. At any rate, aren't anecdotes great! Carpe diem, er, uh, credit card!
I thought the way David Gregory kept asking Christina Romer to explain the difference between Obama's claim: "fundamentals of the economy are strong" and McCains exact same claim, circa September, 2008, was hilarious...
Detroit's Beautiful, Horrible Decline
"Jobless Claims Would Have to Approach 1m to Reach the 1982 Level, As Percent of Labor Force"
They will.
Combined federal and state corporate tax rates relative to OECD countries 2008
Anonymous, are you talking about your delinquent neighbor, who hasn't made a mortgage payment in a year, while still living in the house for free, and managed to save thousands of dollars; the guy who bought a new jeep with a credit score of 800 before running off to Texas; your neighbor who works less overtime (instead of being laid off) and only earns $4,000 a month now; the guy who declared bankruptcy with $50,000 left in home equity stuffed in his mattress to go on a cruise. You can always apply for an extension of unemployment benefits from your prior high paying IT job, which is more than making pretzels. Don't you just love the resilience of the American people!
Mark,
we all know that the probability of a Great Depression is very small, but I am concerned by what you wrote about how you witness a parking lot full of cars, people going to the movies and a full food court.
What you described, of course, is a nonrandomized sample size of one. In fact, it may have even been subject to excessive emotion.
In any case, anecdotal evidence should not be construed as anything more than a curiosity because to do otherwise would lead to major mistakes in making inferences about the actual state of the economy.
--Pingry
Pingry, you and Mark both have valid arguments. However, I doubt during the Great Depression there were many places that looked like Christmas in March (particularly, in place like Auburn Hills, which is the world headquarters of Chrysler). Here are some aggregate data:
Friday, March 13, 2009
Retail sales outperform expectations
Retail sales were stronger in February than expected, according to statistics released Thursday by the U.S. Commerce Department.
Total sales volume for U.S. retailers dropped just 0.1 percent last month, which was substantially better than the consensus forecast of a 0.5 percent decline.
Even better was the news that retail sales, excluding automobiles, actually increased by 0.7 percent in February.
Sales volume increased in February for clothing, electronics, furniture and gasoline. It declined for automobiles, building materials and restaurants.
The Commerce Department also revised the January retail figures upward.
January actually saw a 1.8 percent increase in retail sales, based on updated data. The initial report for January had pegged the increase at 1.0 percent.
Since Obama plans to enact legislation that will (eventually) turn out the lights in that mall, you may rest assured that the lines will go away.
My family and I just spent a week at Disneyland in Anaheim, CA. Place was packed. At the end of the day, after the fireworks show, my 8-year old daughter could have fallen asleep standing up and be carried out of the park by the huge crowd.
Yes, I know, it's an anecdote, but it's not what I expected. I had hoped for an empty park where I wouldn't have to wait 40 minutes to go on Toy Story Midway Mania. :-/
Its easy when you have a job to sit back, read these articles, look at all those people at the mall and say "gee things really arent really that bad are they?"
Then your boss's boss walks up to you and say "I need to speak with you for a moment" He is chatting it up with you as you walk towards what appears to be the HR office. Your hearts starts to thump wildly, you realize this is it. He sits you down and says "The company needs to survive so we are eliminating your position."
Now your looking at those same articles, those same lines of people at the mall and wondering how many of these people are unemployed while your desperately trying to pay off thousands of dollars of debt and make your house payment while your health insurance premium has now been raised over 400% because of Cobra.
Yeah, things arent so bad... for those that HAVE a job!
schmuck
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