Have a look at this single chart, Number of Unemployed per Number of Job Opening below. It is from David Rosenberg, and is pulled from a longer piece David published today in the Think Tank.

>

THE TRUEST PICTURE OF EXCESS LABOUR SUPPLY

ue-per-job-opening3

>

As titled above, Rosie describes this as “THE TRUEST PICTURE OF EXCESS LABOUR SUPPLY” in the United States today. Its hard to argue with that contention . . .

~~~

See this EPI chart also

Category: Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

76 Responses to “The Truest Picture of Excess Labor Supply”

  1. leftback says:

    Read the entire article, folks. It’s very well written. Those of us who have pointed at “hours worked” as evidence that the recession is not over now have a host of new metrics to enjoy.

  2. ben22 says:

    Faber has some interesting takes on jobs in his latest if anyone is a subscriber.

  3. Chief Tomahawk says:

    Uh the double derivative there appears to be positive still. Good thing we’ve got Uncle Sam’s unlimited credit line to put a floor under things…

  4. ben22 says:

    You know it is crazy we have this much excess labor considering that the private sector in the US has only created 1.1 mil. jobs in the last decade, 2.4 mil. in the public sector and the B/D Adjustments are creating the highest ever amount of phantom jobs.

    43,000 and 77,000 in construction and leisure respectively in the most recent, I call bull shit.

  5. curbyourrisk says:

    I once had an arguement with a colleague that just like everything else lately, we have gone through an employment bubble. We were over employed. He thought I was insane and said as long as people are out of work, it was impossible. I asked him why? No one is gauranteed a job, it is not our right. There is nothing that says just because yu want to work, you are entitled to a job. We had people employed at companies just because the companies did nto want to let them go and they could still afford to pay them. Not because they were necessary. Well, as soon as things went bad…who were the first to go???? Those that were not needed. I say……they were not needed to begin with. Hence…an employment bubble.

  6. cvienne says:

    As soon as all those nano-technology research @ development positions (that Franklin’s buddies are preparing students for) become available, the problem will be solved…

    But then at that point, who’s going to cook our hamburgers, or greet us at the entranceway to the big box?

  7. What concerns me the most about activities coming out of Washington is very little seems to be targeted at private sector job creation. The stimulus bill had a cute “USA” content requirement and Canada and Mexico retaliated. The cap and trade bill contains a the Waxman tariff amendment (of which no house rep read since it was in the 300 page addendum not available to congressman voting on the bill). And the potential tax on foreign profits is resulting in corporate inversions at a near record pace, i.e., more U.S. job losses. Taxing of healthcare benefits.

    I am not saying these issues do not need to be addressed, but tackling all these issue that result in increased taxes at a time when the economy is on its ear will not promote job growth.

  8. ben22 says:

    I am not saying these issues do not need to be addressed, but tackling all these issue that result in increased taxes at a time when the economy is on its ear will not promote job growth.

    I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

    - Winston Churchill

    I wonder how he would feel about a nation that tries to buy itself into prosperity via more credit/debt?

  9. cvienne says:

    @curbyourrisk

    “We had people employed at companies just because the companies did nto want to let them go and they could still afford to pay them. Not because they were necessary. Well, as soon as things went bad…who were the first to go???? Those that were not needed. I say……they were not needed to begin with. Hence…an employment bubble.”

    You see – the thing NOW is that all these “companies” are owned by the US Government…

    The US Government NEEDS these employees not for profits, but for VOTES…

    So going forward we’re going to have to start factoring VOTES into inventory replacement cycles if we want to arrive at the proper metrics…

  10. leftback says:

    “I once had an arguement with a colleague that we have gone through an employment bubble.”

    So true, I laid off two people a month ago and haven’t noticed a thing. They were passengers. Despite the slack in the labor market, I would contend that we have barely scratched the surface of right-sizing the work force.

  11. willid3 says:

    disciplinedinvesting, we tried the other version for 8 years. and had the worst ever job creation performance ever.

    Total Nonfarm Private Employment, 1992-2009 (from BLS)

    (Thousands) *

    December 1992 ( 90,537)
    December 2000 ( 111,681)
    December 2008 ( 112,542)

    Total Nonfarm Government Employment, 1992-2009

    (Thousands) *

    December 1992 ( 18,878)
    December 2000 ( 20,804)
    December 2008 ( 22,532)
    Industry Change, May 1999-2009
    (thousands of jobs)*

    Private healthcare 2898
    Food and drinking places 1567
    Gov educ 1390
    Professional and business services 885
    Gov except health and ed 843
    Social assistance 796
    Private education 772
    Arts, entertainment, and recreation 188
    Gov health 148
    Mining 133
    Financial activities 130
    Utilities -40
    Transportation and warehousing -43
    Retail -91
    Accomodations -119
    Wholesale -166
    Construction -238
    Information -525
    Manufacturing -5372

    Employment Growth Summary, 1992-2009

    (Thousands) *

    December 1992 ( 109,415)
    December 2000 ( 132,485)
    December 2008 ( 135,074)

    and i would guess that the population in 2000 wasn’t 300 million either

    and to top it off (makes it obvious todays mess was created by job destruction)

    Household Debt/Disposable Income

    2008 130%

    2003 116.4%

    1998 92.6%

    1993 86%

    1988 81.2%

    1983 66.4%

    1978 68.7%

    1974 63.5%

  12. Steve Barry says:

    Why does it seem so many charts went totally off the scale the last few years?…this one, debt to GDP, housing, P/E for the S&P…

  13. leftback says:

    Slightly OT: Oil was down today on a day when the $ was being hammered. That’s bearish, and then you can add in an extra 500,000 people who will not be driving to work (we will see a -450 to -500K number tomorrow) and the factory that they used to work in – $70 oil seems expensive – it’s bye-bye oil longs, time to say goodnight.

  14. willid3 says:

    i guess if we can have an employment bubble, we can also have an unemployment bubble to?
    and we must also have a population bubble. even though we are barely growing. we just haven’t yet gone negative like Japan, yet

  15. cvienne says:

    @lefty

    I’m watching copper too (FCX as a proxy)…

    It started out the day UP 6%…Now it has retraced half of that…If it ends the day flat, karen will have a nice little ‘shooting star’ candle…

    However, I’m still inclined to let the ‘pumpers’ keep the S&P afloat through the weekend…It’s potentially setting up for a big spike Monday morning (7/6) as they put the funds to work…

    The selling will start promptly at 11am EST…(5am Hawaii time)

  16. cvienne says:

    @lefty

    I’m watching copper too (FCX as a proxy)…

    It started out the day UP 6%…Now it has retraced half of that…If it ends the day flat, karen will have a nice little ‘shooting star’ candle…

    However, I’m still inclined to let the ‘pumpers’ keep the S&P afloat through the weekend…It’s potentially setting up for a big spike Monday morning (7/6) as they put the funds to work…

    The selling will start promptly at 11am EST…(5am Hawaii time)

  17. cvienne says:

    @lefty

    I’m watching copper too (FCX as a proxy)…

    It started out the day UP 6%…Now it has retraced half of that…If it ends the day flat, karen will have a nice little ‘shooting star’ candle…

    However, I’m still inclined to let the ‘pumpers’ keep the S&P afloat through the weekend…It’s potentially setting up for a big spike Monday morning (7/6) as they put the funds to work…

    The selling will start promptly at 11am EST…(5am Hawaii time)

  18. cvienne says:

    sorry about the repeat posts…TBP keeps locking up on submit

  19. leftback says:

    Speaking of Japan, it is already Tankan again. (I never get tired of that joke!)

    http://www.bloomberg.com/apps/news?pid=20601101&sid=amXbhYdCjpvw&refer=japan

  20. Thor says:

    LB – what are you basing the -450 to -500K number on? We were expecting something similar last month based on the ADP report, the BD numbers threw that prediction out of the window. Wonder if that will happen again this month.

  21. cvienne says:

    @lefty

    Re: Japan

    I’m trying to do my part for them…I bought a new Toyota truck last month (and have gone out to eat sushi twice in the past week)…

    Incidentally [re: New Cars]…I’d actually watch for a “one-off” stabilization in car sales because of this “Cash for Clunkers” deal…

    So the way it’ll work is that it’ll get picked up as the newest “green shoots” thing, but little do they realize that it’ll be the last car that ANYONE buys…forever!

  22. ben22 says:

    LB said:

    So true, I laid off two people a month ago and haven’t noticed a thing. They were passengers.

    Every time I drive by road work being done by DELDOT or PENDOT all I see are a bunch of people standing around and one or two of them working. One example I thought of when I read your post.

  23. leftback says:

    “LB – what are you basing the -450 to -500K number on?”

    ADP -473K this morning and the fact that BLS cannot produce back-to-back obvious lies. Can they?

  24. Bruce N Tennessee says:

    http://www.cnbc.com/id/31685244

    Refinance Rules Expanding to 125% Loan-to-Value

    “Homeowners refinancing their mortgages through loans backed by government agencies will be able to borrow up to 125 percent of their homes’ value under new regulations enacted Wednesday.”

    There is a little story in William Faulkner’s As I Lay Dying…about the young girl in the family who finds herself pregnant..goes to the druggest (Chemist, Lefty) and tries to find a cure…the sleazy druggist recommends the “Hair of the Dog” treatment, which of course is the same thing that gave you the illness in the first place…

    Saying is common enough here in the South…Apparently hasn’t made it as far north as Washington, DC

  25. Thor says:

    LB – true, but last month there was quite a large discrepancy between the ADP and gubmint numbers. Sure they can do it again – why not?

  26. Mannwich says:

    @leftback: “Yes they can”. And yes they will…….

  27. cvienne says:

    @Bruce

    They might as well take it to 375% so as to match the debt to GDP ratio…

  28. willid3 says:

    well the BLS number have been suspicious for what 9 years now? why change whats worked so well. but if you look at the yearly numbers, you really start to wonder, they don’t seem to match up.

  29. My point exactly. So it is better to have the government creating more jobs than the private sector? At some point Iwould think the private sector needs to create jobs. Otherwise who pays the salaries of the public sector?

  30. Thor says:

    It’s definitely something we can watch for tomorrow. If the unemployment numbers are better than we think they should be, and off quite a bit from the ADP numbers, let’s see if that number was made up from more increases in the BD.

  31. thetanman says:

    It is pretty clear we had an employment and wage bubble. Its going poof now. I had to let a guy go and use outside people in emergencies. Now I do almost everything myself. Becoming a decent plumber, but it still sucks. At least you don’t have to mess around with that damn solder anymore.

  32. ben22 says:

    DI says @ 2:14:

    At some point Iwould think the private sector needs to create jobs. Otherwise who pays the salaries of the public sector?

    As Faber says in his most recent:

    In other words, the dynamic sector of the economy – the private sector – is hardly expanding whereas the mostly unproductive government sector is exploding. The State is becoming an increasingly powerful state within the State! Not good for one’s personal freedom in my opinion! Nor, for that matter, for one’s future tax liabilites!

    Might help you answer how the salaries are paid DisciplinedInvesting.

  33. leftback says:

    More bearish news for oil and transports:
    http://www.bloomberg.com/apps/news?pid=20601109&sid=atxf.CanQuMU

    GS prop trading can stop bidding up the futures any time now. ARE YOU LISTENING, MISTER BLANKFEIN ??
    By the time Matt Taibbi is done with them those guys will not be able to walk the streets safely. Pitchforks….

  34. thetanman says:

    Bruce,

    Its weird: we know they will prop things up no matter what, but these policies still seem shocking. Obviously I need to get with the new (same old) program.

  35. Transor Z says:

    Why does it seem so many charts went totally off the scale the last few years?…this one, debt to GDP, housing, P/E for the S&P…

    Nothing that a little placebic information can’t cure.

    Query: WTF is going on? How do we categorize the events we see unfolding?

    A: [BEGIN 'EXPERT TALKING HEAD' SUBROUTINE] “Nobody knows for sure. [END OF USEFUL INFORMATION. MESSAGE CONTINUES] Well, this is definitely the worst economic crisis since the Great Depression. But this isn’t the Great Depression. It’s something else. The Great Depression was much worse, with the bread lines and the hobos and the Andy Hardy movies. Today is different. Today hobos are called “homeless” and don’t ride trains and steal apple pies from window sills and the soup kitchens don’t have Walker Evans taking masterpiece b&w photos to capture the human tragedy. We have handheld phone cameras today. Totally different situation.”

    [BEGIN OCTOBOX VISUAL DISTRACTION/ILLUSION OF COMPREHENSIVE INFORMATION]

    B: [BEGIN SNARKY FOIL TO TALKING HEAD A SUBROUTINE] “Well, A, as you know I would I completely disagree with you there . . .”

    [BEGIN GROUP LAUGHTER TO CREATE ILLUSION OF INTIMACY WITH VIEWER]

    A-H: [INSERT HIP KNOWING LAUGHTER]

    C: “No surprises there, B!”

    A-H: [INSERT REACTIVE KNOWING LAUGHTER]

    Host: [ASSERT ILLUSION OF REGAINING CONTROL OF CONTRIVED HIJINKS] “Okay guys, let’s stay on point here. Have to watch you kids . . .”

    A: [HUMOROUSLY FEIGN EXASPERATION WITH SCRIPTED OCTOBOX HIJINKS]: I’ll say it again, Host:
    this isn’t the Great Depression. It’s something else. Today hobos are called “homeless” and don’t ride trains and steal apple pies from window sills and the soup kitchens don’t have Walker Evans taking masterpiece b&w photos to capture the human tragedy. Today is different. The Great Depression was much worse, with the bread lines and the hobos and the Andy Hardy movies. We have handheld phone cameras today. Totally different situation. This is definitely the worst economic crisis since the Great Depression. [BEGIN USEFUL INFORMATION] “Nobody knows for sure.” [END OF USEFUL INFORMATION]

    [TEASER FOR MORE INSIGHT FROM A AFTER THE BREAK/CUT TO COMMERCIAL BREAK]

  36. franklin411 says:

    @ben
    I’d be careful about quoting Churchill on economic matters: his policy of putting England back on the gold standard in the 1920s is considered to be one of the major causes of the Great Crash of 1929. Churchill himself considered it his greatest blunder (and he had some other doozies, like Gallipoli!).

    http://en.wikipedia.org/wiki/Winston_Churchill#Rejoining_the_Conservative_Party_.E2.80.93_Chancellor_of_the_Exchequer

  37. willid3 says:

    disciplinedinvestor it would be nice if they would create jobs. problem is they haven’t been for so long they are probably out of practice now. they are quite adept at eliminating them though. or sending them else where. in fact those things they can do blind folded, and at (dare i say it) warp speed!

  38. cvienne says:

    @Franklin411

    I’d be careful about quoting Obama or Summers (for the record)…

  39. ben22.

    I was being rhetorical. I knew the answer. Again my point is, the private sector needs to create jobs. We don’t necessarily need to cut taxes, just don’t raise them at this point in time.

  40. ben22 says:

    Franklin,

    That may be the case, but I do not at all disagree with the quote I listed above.

  41. Thor says:

    Franklin – as a teacher (are you really a teacher?) you should know better than to send a link for wikipedia as a source. Whether the information is correct or not, that you would use them as a source is frightening – is this what our educational system is spitting out these days?

  42. ben22 says:

    @DI,

    Yeah I figured you were, and I agree with you. The tax issue aside, I’d much prefer to see job creation in the private sector than the public, however, the 10 year trend isn’t on my side and given what seems to be this administrations agenda, I doubt that is going to change in the next few years.

  43. Mannwich says:

    I believe it was leftback who predicted a month or two ago that this market would likely bore us to tears this summer with this kind of low volume sideways action. Am I remembering that right? Good God, this is booorrrriiinnnngggg. Reminds me a bit of last summer. Kind of eerie.

  44. cvienne says:

    @Manny

    I think lefty has gone to putting on “trailers”…

    Therefore, I think he probably thinks it’s going to trade “sLideways”

  45. cvienne says:

    @lefty

    That’s going to be a hell of an ugly candle on FCX today if it closes at $50…

  46. leftback says:

    Bruce: Did you see that Diprivan (aka The Milk of Amnesia) may have been involved in Michael Jackson’s death?

  47. Bruce N Tennessee says:

    No, didn’t see it, been up to my armpits in patients today, but I’ll look at it tonight…

  48. Thor says:

    What a boring day in the markets – is it going to be like this all summer?

  49. wunsacon says:

    Dang, I wanted to create this exact chart. Too often, I feel “creative envy” while reading posts here….[sigh...not in this line of work]… Great stuff.

    What’s happening to employment? It’s Perot’s Giant Sucking Sound finally being heard without the presence of a Masking Bubble. Actually, it’s Perot’s Giant Sucking Sound “cubed”, because we now also have (a) offshoring of all knowledge work and (b) greater and greater automation.

  50. leftback says:

    “What a boring day in the markets – is it going to be like this all summer?”

    ZZZZZZZZZZZZZZZZZZZZZZZZ

  51. Andy T says:

    Agreed on the boredom….sort of felt like watching paint dry today…can’t shake the feeling that we’re setting up for a “moment.” VIX keeps falling….Sheeple getting lulled to sleep….

  52. I-Man says:

    @ Left…
    totally bro- wake me when we break some necklines…

    At least I have some excitement planned for later… watching our USL Portland Timbers kick the crap out of Seattle’s MLS Sounders… http://www.portlandtimbers.com/

    Game actually sold out!

  53. I-Man says:

    @ Andy T

    Looks like ole VIX-E might close positive today after all… hmm… puts a little TOO cheap going into today?

  54. ben22 says:

    Re: VIX

    There is a 16 week trend in the VIX that signals it should change in the next few weeks, it’s been in place since 10/07.

  55. leftback says:

    VIX OCT 50 calls.

    I-Man, enjoy those lumberjacks, not to mention the IPAs.

    LB is looking ahead to NEXT Wednesday when England meet Australia at cricket in Cardiff. Play begins at 6am EDT which enables LB to watch 3 hours of the game in the basement of an Aussie pub called 8 Mile Creek on Mulberry Street in SoHo, possibly surrounded by tanned Australian girls wearing green and yellow tank tops drinking Foster’s – all before Mr Market has even opened his eyes.

  56. manhattanguy says:

    As I predicted earlier in the morning this rally fizzled by end of day. Sold half of my $DUG at a decent profit. Covered some $COF shorts. But still holding my core short positions. Today may have been DJIA’s turn to complete the right half of the H-S pattern.

  57. leftback says:

    Only one more day of this utter tedium before Q3 trading begins in earnest with the market opening on Monday.
    Monday July 6th will be the first important day’s trading in a long while.

  58. I-Man says:

    @manhattanguy:

    Whatcha think on the Q’s… complete double top today?

  59. Transor Z says:

    . . . possibly surrounded by tanned Australian girls wearing green and yellow tank tops drinking Foster’s . . .

    At 6am??? Watching cricket??? Plus, you’re a Brit, aren’t you?

    If you score digits (value > 0) in that environment, lefty, you truly da man.

  60. Andy T says:

    Well. Bulls scored a positive day….but does it really feel like a victory? Methinks not….

  61. Looks like ole VIX-E might close positive today after all… hmm… puts a little TOO cheap going into today?

    Maybe it is the 77,000 July $25 puts (as opposed to 16K, for example, in August) that will be in the money if the VIX closes below that point. I’ve been watching that and I’d bet a lot of money those will close worthless.

  62. manhattanguy says:

    “Monday July 6th will be the first important day’s trading in a long while.”

    Will break 9 and 50 emas.

  63. Andy T says:

    So, I’m listening to Bloomberg….reciting something from Bespoke about the jobs number….I shit you not this is what they were saying (something like this):

    “If the jobs number is bad, the market will go up because traders will believe ‘it can’t get much worse’ and will bid up stocks. If the number comes in good, then the market will sell off because traders will then be thinking about possible rate hikes in the future that will wreck the recovery. So you see, bad news can be good, and good news can be bad.”

    WTF? I felt like I was hearing one of those fake correspondents from the Daily Show….

    pretty funny stuff….I guess that’s why there’s a market…..I would think just the complete opposite…I think we’ve been rallying from the March lows in anticipation of “better” news coming….if we get some bad news, I think that it will be bad for the market….

  64. karen says:

    I am finding that the news has become increasingly exhausted and exhausting…

  65. leftback says:

    Andy T: Since it is a short week in the summer in NY, I predict that Thursday is the new Friday, Wednesday is the new Thursday this week. In other words, there will be a light morning trade and then it is off to the Hamptons.

    Transor Z said: “If you score digits (value > 0) in that environment, lefty, you truly da man.”
    Beer is the international language, old sport, especially at 6am. The bantering will be extremely good value.

  66. bubba says:

    AT said: “VIX keeps falling….Sheeple getting lulled to sleep….”

    ….and then BAM! their faces smack the floor as the straw mattress gives way.

  67. Andy T says:

    karen. Agree completely…..the whole cycle feels “exhausted.” It’s about time for something “new” to talk about, lest the ratings and circulation will suffer….wonder what it’s going to be?

  68. Transor Z says:

    Andy T:

    1. Iranian warships seize U.S. freighter, crew in Persian Gulf
    2. Fidel Castro dies; vast new market for vintage U.S. autos, parts opens
    3. India to outsource millions of untouchable jobs to U.S.
    4. White House announces lottery to give 1000 random new home buyers $1 million
    5. Fuel cell technology only 10 years away, experts say

  69. Andy T says:

    So, I listen to mostly Bloomberg TV (via hi speed internet) now…..I can honestly say I’ve kicked the CNBC habit for months now…..someone once asked me: “If you’re not watching CNBC, then how do you know what the good contrarian play is? You wan’t be able to fade CNBC.” I’ve reached the conclusion that Bloomberg is simply a classier, more straightforward way of pimping the same ideas. I’ve been listening to a 15-20 minute gold commercial with Pimm Fox…Frank Holmes telling us about the Indian buying season…some other guy came on and told us how much retail demand he was seeing for bullion delivered…then Peter Boockvar comes and tells us all something we don’t know: the government is debasing the currency, therefore you must own Gold!!! Funny stuff….

  70. leftback says:

    ” Agree completely…..the whole cycle feels “exhausted.”

    Don’t fight it. It’s silly season, it was invented so we could rest our tired trader brains and eat ice cream.

  71. Pat G. says:

    Well hell, there goes the inflation arguement. lol

  72. cvienne says:

    @Transor Z (5:22)

    late to the party because I was at the gym…

    But…

    #6. leftback leaves the Swedish twins at summer camp for the green & yellow clad Aussie triplets!

  73. Natalie says:

    I feel like this graph holds a possible explanation for people attempting to find a job in this economy. My sister just graduated from a good college with her BA and has been applying to jobs left and right. For one part-time admin assistant position, she spoke with the hiring manager and he said he had received over 400 applications in one weekend. It’s insane out there.

  74. FrancoisT says:

    LB said:

    “So true, I laid off two people a month ago and haven’t noticed a thing. They were passengers”

    Does that take into account the drop in business that took place at the same time? Could it be that they BECAME passengers?

  75. [...] No relief in sight with 6 people competing for every open job: [...]

  76. [...] Why do I believe this? As far as I understand the models, it’s conditional on a “value function”, the chance that you’ll receive a good job offer. You go look for a job, see if you get an offer, compare it to your unemployment benefits, and make a choice. Now what do we know about how looking for a job has changed in the past year? From the big picture: [...]