~ ~ ~
25.6% - 1933
20.0% - 1938
19.3% - Nov/Dec 1982 (post WWII high)
17.2% - Oct/2009 (Great Recession high)
"Real" Unemployment Rate
stable at 14.4% in December
FreeVenue public release of Jan 4th MemberVenue guidance ~ Today's
headline USA Unemployment Rate for December may be stable at
but the dire state of the jobless is better reflected by the REAL
Unemployment Rate ... 14.4%. The latter U-6 BLS
rate was also the same as November but is significantly
below the Great Recession induced high of 17.2%
set Oct/2009. That said, today's rate is not even 1/3 the way
back to the pre-Recession low of 7.9% in Dec/2006. To the 12.3
million U-3 unemployed, the U-6
calculation adds the marginally attached: 7.9 million
involuntary part-timers (economically necessitated), 1.1 million
discouraged souls (no longer looking for work as no apparent jobs)
and 1.5 million with school or family responsibilities.
If there is
good news, it is the economy is finally again producing the 103k
jobs/month required to keep the Unemployment Rate from rising
considering natural growth of the labour force via graduating students and immigration less retirements.
suggests a 1.1% Real GDP pace is required to keep the unemployment
rates static and those rates would rise 0.1%/month in a nil growth
environment. The model finds the glide path of U-6 should see the 11.0% natural
unemployment rate (6.0% U-3) achieved in 2017Q1, an event which will
be ushered in by the raising of its key interest rates by the FOMC. Even this
tardy level of progress does
not reflect so much an improvement of the wide-spread malaise or a marginally improving economy as it does the
realities of an aging society.
From Jan/2011 and over the
following 19 years, 10,000 boomers a day started turning 65.
Boomers are the 77
million Americans born 1946 through '64. The number of
people eligible for Social Security will nearly double to 80
million (from 46 million) by the time all the boomers reach 65. So the big
question is: "of the 150,000/month potential, how many are retiring?"
One clue is the falling Participation Rate which has fallen to 64%
from 67% in Y2k. The TRI model assumes it will be 55% by
provides monthly-updated guidance on the status of the current
business cycle with
projected baseline GDP thru 2030. Its current analysis
forecasts annual Real GDP is in secular decline and will decrease
from 1.9% in 2013 to 1.2% by 2020. The inability of the
current business cycle to get traction if founded on the recent
balance sheet recession - a Kondratieff cycle event. When reconciled for
Congress's fiscal policy measure of five massive trillion dollar
Deficits, the model concludes the USA entered a Structural Depression in
gauges Structural GDP plunged to -13.6% in Jan/2009, has since recovered to -4.9% and has averaged -7.1% over the
six-yr duration of this event (compared to -9.7% SGDP 1930-1933).
To maintain the illusion of a healthy economy, Congress plans to
continue these trillion dollar Deficits decades into the future.
Analysis by my
suggests this Keynesian means of using Deficits to keep Real GDP
artificially positive is an unsustainable venture and failing a sea
change in political leadership, the practice will be
truncated by a Greek-scale treasuries yield (7%) crisis in 2025.
The post WWII high for
this Bureau of Labour metric (U-6) is 19.3% in Nov/Dec 1982.
The all time record of 25.6% was set in 1933. By 1937 it had
corrected to 11%, but in a 1938 premature effort to rebalance the
Budget, suffered a relapse to 20%. As seen in the
chart, only the 1971/72 event mirrors the stubbornness of the currently
Marginally attached workers are persons who currently are neither
working nor looking for work but indicate that they want and are
available for a job and have looked for work sometime in the recent
past. Discouraged workers, a subset of the marginally attached, have
given a job-market related reason for not looking currently for a
job. Persons employed part time for economic reasons are those who
want and are available for full-time work but have had to settle for
a part-time schedule.