Thursday, August 13, 2009

Intrade Odds Plunge for Dec. Jobless Rate > 10%

Based on trading for the Intrade contract "US Unemployment Rate in Dec. 2009 to be Greater Than 10.00%," the odds of the U.S. jobless rate being above 10% in December have fallen from almost 90% several weeks ago to 45% today (see chart above).

Originally posted at Carpe Diem.

3 Comments:

At 8/13/2009 2:14 PM, Anonymous gettingrational said...

Thus, the odds are about a coin flip chance (thank you to my college statistics tutor!) .

 
At 8/13/2009 3:29 PM, Blogger Steve said...

The unemployment rate (U3) is slowing its rise, but only because the size of the labor force is falling faster than the number of people with jobs.

Continuing decreases in number of full-time employed. In what world is that a positive?!?

---
http://www.fivethirtyeight.com/2009/08/why-unemployment-probably-wont-hit-10.html

"In July, however – as well as in June – the size of the labor force actually declined, according to the household survey. This is what caused the unemployment rate to decline: although the numerator (the number of people who have jobs) in fact slightly decreased, the denominator (the size of the labor force) decreased more, causing the metric to improve. Some of this is because of so-called discouraged workers – people who do not have a job but have given up on looking for one, and (for reasons that I do not entirely agree with) do not meet the Department of Labor’s definition of being "unemployed". This discouraged workers story has been a bit oversold though: U-4, the measure of unemployment that includes discouraged workers, went down too. Most of this, rather, is a matter of people finding somewhat longer-term alternatives to seeking employment: going back to school, early retirement, joining the Army or the Peace Corps, etc. In addition, both legal and illegal immigration are declining, which takes some pressure off the growth of the labor force. There may also be some reversion to the mean, since these metrics are subject to measurement error and since the labor force had supposedly increased by higher-than-usual amounts in April and May."

 
At 8/13/2009 8:52 PM, Anonymous Anonymous said...

A buying opportunity?

 

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