Ron Griess of The Chart Store puts together a weekly run of oft fascinating charts.
Since this past Friday was NFP day, lets have a look at some of the more telling Employment charts:
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In any great organization it is far, far safer to be wrong with the majority than to be right alone. —John Kenneth Galbraith
Asian currencies continue to sell off vs the $ on the heels of the news yesterday that South Korea said they will look into hot money inflows stemming from the $ carry trade and the Bank of Indonesia said they are looking into the foreign buying of bills. This follows the news a few weeks ago that Taiwan was limiting foreign deposit holdings and Brazil was taxing foreign inflow transactions. As I mentioned yesterday, we may have reached a short term pain threshold in terms of $ weakness and foreign countries are fighting back as they certainly won't wait for...
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June 7th, 2009 at 3:33 pm
UE rate chart should of course have a big fat asterisk on it with explanatory notes about how differently the UE rate is currently calculated and thus how much of an apples to oranges comparison it is to the ’80s especially.
June 7th, 2009 at 4:07 pm
@ Onlooker:
Shadow Government Stats gives us three different measures that may be more apples to apples within each stat. SGS alternate is over 20%.
http://www.shadowstats.com/alternate_data
June 7th, 2009 at 4:13 pm
On a different topic:
Video interview of the author of a book on central bankers (of the U.S. and Europe) during the 1920’s and 30’s:
http://booktv.org/watch.aspx?ProgramId=FV-10194
Name of the book is: “Lords of Finance: The Bankers Who Broke the World”
June 7th, 2009 at 4:19 pm
Wow, those charts are really something. Recovery just around the corner. LOL.
That U-6 chart is amazing…..and not in a good way.
June 7th, 2009 at 4:28 pm
Well, I suppose that all of this unemployment should help to mitigate some of the upward pressure on Treasury bond yields.
June 7th, 2009 at 4:30 pm
on the NFP chart the job losses for this year and 2008 look brutal compared to past recessions
June 7th, 2009 at 4:42 pm
Those charts certainly don’t look inflationary to me. How will any upward wage pressure occur unless/until the employment situation improves?
June 7th, 2009 at 4:49 pm
Franklin411…using his ultimate economic wisdom…has unemployment ticking down to 5% by 2012 (he’s ON RECORD with that – he’s posted it several times here on this blog)…
So don’t worry people, good times are just around the corner…
June 7th, 2009 at 4:51 pm
@cvienne: Don’t laugh. It could happen. If enough of the unemployed stay unemployed and “stop looking for work” (and collecting bene’s….remember, they do run out), then they will no longer be counted in the stats that are reported. They will just be a massive and growing hidden population that doesn’t count according to our government.
June 7th, 2009 at 4:51 pm
@Mannwich:
Think I agree..I see asset deflation as unavoidable. Wages should be down…businesses will be fighting for customers. While I believe you can have asset deflation and price inflation, I don’t believe it will happen this time.
June 7th, 2009 at 5:00 pm
@Steve: However, we may get wage inflation in industries that are constantly being bailed out. Wall Street and the banking behemoths may get wage inflation. Ditto car companies, insurance companies disguised as banks, credit card companies disguised as banks, etc. etc. etc.
June 7th, 2009 at 5:22 pm
@Mannwich (4:51)
The main “stimulus” in the Economic Recovery & Re-Investment Act, is the incentive to simply sit around and not look for a job…but collect a check…
…How can those people be expected to vote against THAT…sounds like a pretty good deal!
June 7th, 2009 at 5:26 pm
You know?
All during the campaign trail last year, I remember these kind of points being made to guys like Robert Reich & Julian Epstein…
They would sit back and laugh and say how those notions were EXTREME and taken out of context…
Now they all TRUE…& yet I see epstein on TV yesterday and now instead of denying it would ever happen, he’s having to spin and defend it’s validity…
June 7th, 2009 at 5:41 pm
mannwich Says-
“Don’t laugh. It could happen. If enough of the unemployed stay unemployed and “stop looking for work” (and collecting bene’s….remember, they do run out), then they will no longer be counted in the stats that are reported. ”
true- but if enough people are out of work longer than the max 39 weeks- well after a while I would think social unrest would kick in- unless they extend unemployment benefits indefinitely or put folks on the welfare rolls-
reality will trump any official number put out
June 7th, 2009 at 5:46 pm
i think the stimulus unemployment extension was in reaction to the U3 and U6. and i while they maybe siting around some, its not like they have any real choice is it? you can want a job, but if there aren’t ANY to be had, you might as well be wishing to win the lottery without paying for a ticket. and its keeps some money in the economy if they can at least pay for some thing (as opposed to what they would do without the check). long ago i was on unemployment once (the company i worked for went out of business) , and it wasn’t fun. and some what like now, there weren’t any jobs to even apply for (mi 80s in Texas. what was called the oil bust then i think). at least back then companies would let you apply even if they had nothing. now they won’t let you do that even. and like some have noted, i think the NFP has been so bent out of shape that comparing the numbers from today to any time in the past is like comparing airplanes with trains. other than both having wheels, they have little in common. and considering that wage increase. i suspect that has been inflated by the cost of benefits that some one added a ‘wages’. not that they have any thing in common (see that airplane and train)
June 7th, 2009 at 6:06 pm
willid3@5:46 –
if you are interested a consistent comparison of unemployment over time, see – Steve Barry@4:07
John Williams is minding the gate
the truth is out there somewhere
June 7th, 2009 at 6:12 pm
Wes Schott. i have seen there site b4. and its probably lots closer than any thing else. its just not what people use (either MSM or government or business either). but its better than nothing
June 7th, 2009 at 6:15 pm
Asset deflation? Price inflation? What about monetary inflation??
June 7th, 2009 at 6:16 pm
The second half of this year is when we start to see the fallout of the unemployment numbers. Severance packages are starting to run out. People are not finding new jobs or are replacing their old job at a lower pay rate.
It has now been 6 months since the total freeze up in credit happened. In it’s place credit is tighter tighter than I’ve ever seen it before.
I’ve talked to a few people at large companies that administer p-card programs that they have in place. Several million a month in spending goes through these cards. The card issuers, like WF and Suntrust are demanding wire payments the day after the cycle cuts off. With credit being this tight, there is no other direction to go but contraction.
The only thing I
June 7th, 2009 at 6:21 pm
Pat G.@6:15
are you from Austria?
Chicago?
London?
June 7th, 2009 at 6:28 pm
@Todd: Good point about the severance plans. Some of these plans were doled out to the more highly paid. Once that spigot is turned off, I’m quite sure we’ll see many, many more home foreclosures that will put even more downward pressure on the housing market and cause more losses for the banks.
June 7th, 2009 at 6:29 pm
@Wes Schott
None of the above and what possible bearing could that have regarding my question?
June 7th, 2009 at 6:32 pm
Cramer the luminary-
headline- 9.4% Unemployment is Good
http://www.cnbc.com/id/31112693
if 9.4 is GOOD 11% unemployment will be GREAT
June 7th, 2009 at 6:35 pm
Pat G.@6:29
schools of thought regarding monetary philosophies
June 7th, 2009 at 6:40 pm
Sal,
the less bad
“second derivative” thingy – (of course, not if it is 11%, unless we can spin it that way)
what else?
June 7th, 2009 at 6:40 pm
@Wes Schott
OK. My school of thought regarding monetary philosophy has to do with realism. Am I wrong?
June 7th, 2009 at 6:42 pm
Pat G.@6:40
no, not at all
housing bubble bursting = asset price deflation
printing money = monetary inflation
June 7th, 2009 at 6:48 pm
@Wes Schott
Great!! Just need confirmation to make sure I’m still on the right track or told why I’m not. Hopefully, you’re right too… lol
June 7th, 2009 at 6:53 pm
Printing physical money = monetary inflation
Right now the fed is buying up bad debt at face value. Most of it is not escaping into the real world. If it is it’s at a trickle. I read something this morning, don’t recall where but the money multiplier effect is at half it’s normal rate of the past decade. So even if money is being released into the real world, it’s not having as much of an effect.
Inflation may be on the horizon, but not this year. The perception of the Dollar as a store of value is what is at risk.
June 7th, 2009 at 6:56 pm
call me sally:
Cramer and Brennan(the article’s author) are both idiots. Has Cramer been right yet?
June 7th, 2009 at 6:58 pm
i am not sure we will see monetary inflation, as the banks are sitting on every dime that has been pumped into them. but we might see some ‘production’ inflation. i.e., the fewer you make of any thing the more expensive it will be not matter what you do. i used to work in aerospace, and the company had a contract to make 2 coffee makers for the air force. because they didn’t make them as a rule (not that any body else did either. and thats why we got the contract), we had to buy equipment to do so, and design them so they wouldn’t spill in violent maneuvers, they ended up costing about 5k each i think. so that sort of inflation i would expect. as fewer widgets get made the higher they will cost to make. but there is also the higher they cost the fewer customers too. and with our ongoing incomes destruction, not sure where the bottom hits
June 7th, 2009 at 6:58 pm
Todd@6:53 -
oui monsieur
although, i am not so sure that one can print “real” money
in any case, agree with your assessment
June 7th, 2009 at 7:23 pm
@Wes
The TBTF banks discovered that they really didn’t have to actually have the funds on hand to be able to lend the funds. They just had to have the cash flow to support actual withdrawals and support day to day operations. The fed has been playing catchup to this by trying to supply the needed liquidity to facilitate transactions that actually flow through the fed system. Now that the Shadow banking system is starting to flow through the Fed, they need more money to facilitate the transaction flowing through their system.
So real money is money flowing through the fed and not the shadow banking system. It’s just that banks, insurance companies and large mulinationals have their foot in both systems.
June 7th, 2009 at 7:33 pm
Having taken the first trip in a while, I observed three things. First, travel is way down. Airports and hotels seem pretty darned quiet. Second, flights are jammed. If the airlines can’t make money with those loading factors it can only be because fixed overhead has not shrunk with the market. Third, seems the hotels are raising prices substantially. Apparently those that are traveling are not price sensitive buyers. They intend to max their income on lower volume and higher prices.
Kind of the opposite of what I expected.
June 7th, 2009 at 7:44 pm
Todd@7:23 -
i am with you really well up until the last sentance of the first paragraph – then I lost it.
thought it would have been the fed flowing into the shadow banking system, not the other way – I guess the debt goes onto the books of the fed, and the fed prints a few bucks for their banks for the transaction flow, including Lloyds bonus
real 1’s and 0’s, anyway
sorry,
June 7th, 2009 at 7:49 pm
not sure but my last trip (vacation to really wonderful place. extremely popular) i noticed the same airports almost empty. and the last time i flew there, the plane was full, not so much this time (we even had a PNR get on, going home i suppose). can’t say much about the hotels, but the resorts aren’t exactly full either.
June 7th, 2009 at 7:51 pm
You can read WSJ & FT subscriber articles for free and it is legal.
I tried it and it works
http://www.businessinsider.com/how-to-read-the-wsj-for-free-online-2009-6
June 7th, 2009 at 7:53 pm
going to Brasil next weekend
hotel seems not to have cut their price – maybe that cash flow thing
i will report on my travel observations re. the economy – in the air and in the developing world
June 7th, 2009 at 8:15 pm
RE: Inflation/deflation
Regardless of current policies and anecdotal observations, we have a fiat currency, and fiat currencies only work toward one end, and that’s inflation. We may have stuffed a cork up the goose’s ass, but we’re still force feeding it. In the end, either the goose will die or there will be a huge mess.
June 7th, 2009 at 8:22 pm
MA,
you into fois gras?
June 7th, 2009 at 8:32 pm
CRE is still lurking. This big problem isn’t going to just magically disappear.
http://www.calculatedriskblog.com/2009/06/hotel-owner-walking-away.html
June 7th, 2009 at 8:41 pm
Nope – just thinking of the old production saying regarding trying to get the S through the goose.
June 7th, 2009 at 8:43 pm
Nobody predicted this would happen. Nope, nobody at all……
http://www.bloomberg.com/apps/news?pid=20601109&sid=alC3LxSjomZ8
June 7th, 2009 at 8:43 pm
Mannwich:
Before CRE hits, we’ll have Alt-A and Option ARM unwindings. Then we’ll get hit with the bulk of RE defaults. Magic might be all that can help us.
June 7th, 2009 at 8:46 pm
@Marcus: Throw in maxed out credit cards (many of which won’t be repaid) and that’s quite a stew the feds and banks have there to stir.
June 7th, 2009 at 8:47 pm
Manny,
come on green shoots…..
Schiff, Puplava, Pretti, Faber, Roubini, Kirby, Mannwich, Wes, Marcus, Andy, BR…..
well, maybe I lost track and added or subtracted a few out of my imagination, but….
June 7th, 2009 at 8:48 pm
@Alfred E – I’ve noticed the complete opposite wrt to airlines and hotels.
I travel back to Seattle regularly, and the prices are down significantly from 6-9-12 months ago, and hotel prices are ridiculously cheap now at the higher end hotels (not all though – some are still holding out for top prices).
June 7th, 2009 at 8:49 pm
Marcus -
this will not be over in a day….as you know
hopefully it will be over some day….as it will
can you say Tsing Tao instead of Budweiser?
June 7th, 2009 at 8:51 pm
@Wes: In other words, nobody that matters to those that are running things in this country, so we’ll get the old (but very handy), “nobody could have foreseen” garbage when the shite hits the fan again.
June 7th, 2009 at 8:54 pm
Manny @8:51 -
that is not exactly what I meant
but,
I do expect the shite to hit the fan again, before this is over
June 7th, 2009 at 9:13 pm
@ Wes
Sorry for the late reply, I may be off in using the right terms, but the net of the feds actions is that there has been little spill over from their actions so far to date. The Shadow banking system is coming onto the Fed’s balance sheet as they fail. Or more directly the cash flow of payments is failing. It’s why the Insurance companies have been placed under the TARP blanket. These are balance sheet transactions accounting tricks.
I guess the trickle is the service fees.
June 7th, 2009 at 9:27 pm
Todd@9:13 –
have you seen Tyler Durden’s upside down pyramid?
i’ve been wondering about that
liquidity, cash flow, deflation first, inflation second – oh god it is hard to be an Austrian
June 7th, 2009 at 9:31 pm
Michael Lewis’ take. Am surprised CNN (of all places) would interview him. Give them credit though.
http://www.huffingtonpost.com/2009/06/07/michael-lewis-wall-street_n_212340.html
June 7th, 2009 at 9:43 pm
Manny,
did you read Liars Poker?
I did, many (not manny) years ago
yeah, i would say that he knows what is going on, we can add him to the list, along with Taleb and so many others….
June 7th, 2009 at 9:46 pm
I have not, but might add it to my summer reading list. I have read “Moneyball” and many of his articles. I typicall like is stuff. He usually does a solid job.
June 7th, 2009 at 9:51 pm
Manny@9:45 -
it’s pretty old
but, i picked it off the shelf the other day when i was needing somthing to read (waiting for BR’s book to publish and ship)
still interesting and easily transposed to recent times in the financial industry
June 7th, 2009 at 11:19 pm
@ Pat G, Wes Scott — 6:48 pm
Before you get too excited about all the “monetary explosion”, take a trip over to the shadowstats site and see how M1, M2, and M3 have behaved.
The Fed has to print a LOT more credit before the toxic debt black hole is washed away, and more still before it generates significant monetary inflation. We are still in deflation mode. The CPI says so.
June 8th, 2009 at 6:40 am
[...] Barry Ritholtz: Roundup of Employment Charts | The Big Picture [...]
June 8th, 2009 at 6:41 am
[...] BLS data was looked at askance, as the Birth Death adjustment Goosed NFP. When we look at various employment charts, the picture remains downright [...]
June 8th, 2009 at 9:51 am
[...] Barry Ritholtz: Roundup of Employment Charts | The Big Picture [...]
June 8th, 2009 at 11:33 am
comparing the unemployment and U6 charts makes the point that all the data reporting needs to have a backward look at least to 1970, and better to 1950. U6 makes it look like this downturn will destroy planet earth, but the unemployment chart shows we haven’t even gotten up to the unemployment in 1982.
ladies and gentlemen, a deep breath please.
you have to tranche sentiment by source. i’ve said the big three factors are distrust, hardship and uncertainty.
i don’t believe the hardship is depressing the market any more than it did in 1982. in fact, i think the hardship is already priced in.
what’s keeping things down are distrust and uncertainty.
distrust is usually stated as accusations of malfeasance, incompetence, collusion and fraud in or through current government policy and business practices. one third of this seems sensible to me, one third of it is stupid railing against irreducible human nature, and one third of it is politics. so the distrust is 2/3d’s cultural and one third sound economic thinking.
the uncertainty is just what it is, uncertainty. you can’t theorize, rationalize or predict uncertainty. it can only be reduced by structural factors and momentum. we less of both right now than we did a year ago. amost everything said about inflation, deflation, the dollar, gold, resource prices etc. is pointless just because it is talk about uncertainty.
we are in a recession like other recessions. we distrust policy, but mostly for silly reasons. we want to predict the future, but the future at this point has become much more unpredictable. deal with what is.
June 8th, 2009 at 6:59 pm
@ constantnormal
Thanks for the money supply link. I looked at M3 which is the combination of all three and it appears to be significantly higher. Am I not reading that chart correctly? Besides, the U.S. is not the only country who is attempting to re-inflate. The CPI is a bogus BLS number which just measures prices not monetary inflation.
June 8th, 2009 at 10:42 pm
[...] - Ron Griess of The Chart Store puts together a weekly run of oft fascinating charts. Since this past Friday was NFP day, lets have a look at some of the more telling Employment charts: via Roundup of Employment Charts | The Big Picture. [...]