ECRI Leading Indicators: Slowing Growth

The usual charts from from ECRI ( shows a deceleration, not outright recession:


Weekly Indexes Chart

U.S. Coincident Growth Rate Chart


Category: Economy, Employment

BNN Media Appearance: June 2, 2011

BNN speaks to Barry Ritholtz, CEO and Director for Equity Research for Fusion IQ.


Click for video

Headline : June 2, 2011 : Markets [06-02-11 12:30 PM


Category: Media, Video

Friday AM Reads

Once you digest today’s punk unemployment data, here are some worthwhile Friday reads: • Chinese Economic Slowdown May Lead to 75% Plunge in Commodities, S&P Says (Bloomberg) • The Rising Price of Oil and the Quality of Your Asparagus (Daily Reckoning) • Battle of the fund titans: . . . .-David Einhorn’s Speech at the Sohn…Read More

Category: Financial Press

Punk NFP Report

I am getting my expired Passport renewed, so I will miss all the fun with today’s fugly Employment report. A mere 54k jobs created in May, vs. estimates of 150k-160k. Unemployment goes to 9.1% from 9%. Feel free to share any insights, or data analysis you may have. Be back soon…

Category: Employment

Payroll growth disappointment

May Payroll adds totaled only 54k, well below expectations of 165k and the private sector added just 83k jobs vs the consensus of 170k but the 83k compares closely to what ADP reported on Wednesday of 38k. Also, the prior two months were revised lower by 39k. The household survey said 105k jobs were added…Read More

Category: MacroNotes

An Unusually Unusual NFP Payroll Day!

We get the Non Farm Payrolls report today. Expectations are for an increase in NFP to rise 165,000, following April’s gains of 244,000. But there is an unusual amount of hair on that number, as I shall explain shortly. Indeed, today is an unusually unusual NFP report. For one thing, the economy’s growth rate is…Read More

Category: Employment

Unemployment During the Great Depression Has Been Overstated

Unemployment During the Great Depression Has Been Overstated and Current Unemployment Understated (We’ve Now Got Depression-Level Unemployment)


The commonly-accepted unemployment figures for the Great Depression are overstated.

Specifically, government workers were counted as unemployed by Stanley Lebergott (the BLS economist who put together the most widely used numbers) … even though gainfully employed and receiving a pay check.

If we’re trying to compare current unemployment figures with the Great Depression, the calculations of economists such as Michael Darby are more accurate.

Here is a comparison of Lebergott and Darby’s unemployment figures:

Year Lebergott Darby
1929 3.2% 3.2%
1930 8.7% 8.7%
1931 15.9% 15.3%
1932 23.6% 22.9%
1933 24.9% 20.6%
1934 21.7% 16.0%
1935 20.1% 14.2%
1936 16.9% 9.9%
1937 14.3% 9.1%
1938 19.0% 12.5%
1939 17.2% 11.3%
1940 14.6% 9.5%

(see Robert A. Margo’s Employment and Unemployment in the 1930s.)

We’ve Got Depression-Level Unemployment

Unemployment is currently underreported. Even government officials admit that their “adjustments” to unemployment figures are inaccurate during recessions.

In addition, the most widely-cited statistics use the Department of Labor’s Bureau of Labor Statistics’ “U-3″ methodology. But “U-6″ figures are more accurate, because they include people who would like full-time work, but can only find part-time work, or people who have given up looking for work altogether. U-6 is also is closer to the way unemployment was measured during the Great Depression than U-3

Current levels of unemployment are Depression-level numbers, especially when compared to Darby’s figures.

For example, economist John Williams puts current U-6 unemployment at 15.9%. That’s higher than 9 out of 12 years charted by Darby.

And there are certainly Depression-level statistics in some states. For example, official Bureau of Labor Statistics numbers put U-6 above 20% in several states:

  • California: 22.0
  • Nevada: 23.7
  • Michigan 20.3
  • (and Los Angeles County has 24.1% unemployment, higher than any of the Depression years as reported by Darby)

Williams puts SGS unemployment – which he claims is the most accurate measure – at 22.3%. That’s higher than 11 out of 12 years charted by Darby.

Youngstown State University’s Center for Working Class Studies puts the “De Facto Unemployment Rate” at 28.76%. I’m not sure if that compares to methods used during the Great Depression, but it surpasses all 12 out of 12 years charted by Darby.

More People Are Unemployed than During the Great Depression

As I noted in January 2009:

In 1930, there were 123 million Americans.

At the height of the Depression in 1933, 24.9% of the total work force or 11,385,000 people, were unemployed.

Will unemployment reach 25% during this current crisis?

I don’t know. But the number of people unemployed will be higher than during the Depression.

Specifically, there are currently some 300 million Americans, 154.4 million of whom are in the work force.

Unemployment is expected to exceed 10% by many economists, and Obama “has warned that the unemployment rate will explode to at least 10% in 2009″.

10 percent of 154 million is 15 million people out of work – more than during the Great Depression.

Given that the broader U-6 measure of unemployment is currently around 17% ( puts the figure at 22%, and some put it even higher), the current numbers are that much worse.

Read More

Category: Employment, Think Tank

Lumber Prices: Leading Indicator for Private Nonfarm Payrolls?

In the chart below we take a look at the relationship between lumber prices and private nonfarm payrolls.   Clearly they tend to move together on a monthly basis.  One of the transmission mechanisms of monetary policy is the impact of interest rate changes on the  construction sector, which has historically been a leader of…Read More

Category: Commodities, Employment

Late Afternoon Reading

Quite a few fascinating items added to Instapaper today — these are what I will be reading on the way home tonight: • The Tiffany Economy: A Tale of Two Recoveries (Morningstar) • Is the Slow Economic Data Due to Japan or Something Deeper? (Be Spoke) • Geithner and Goldman, Thick as Thieves (Truth Dig)…Read More

Category: Financial Press

How Bad Is Housing?

<Click on chart for larger image> • The Wall Street Journal – Housing Imperils Recovery Home prices have sunk to 2002 levels, effectively wiping out almost a decade’s worth of home equity across the U.S. and imperiling the fragile economic recovery as Americans confront the falling value of their biggest investment. A closely watched home-price…Read More

Category: Data Analysis, Real Estate, Think Tank