Unemployment jumps to 8.5 percent. Highest in 25 years

[Liberal_in_LA]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aoxQ7YAvdMfU&refer=us

U.S. March Unemployment Probably Rose to 25-Year High (Update1)

By Bob Willis

April 3 (Bloomberg) -- The U.S. jobless rate rose in March to the highest level in 25 years and payrolls plunged, exposing the economy to the risk of renewed declines in spending that would scuttle a recovery, economists said before a report today.

Unemployment jumped to 8.5 percent from 8.1 percent in February, according to the median of 79 estimates in a Bloomberg News survey. The figures may also show employers cut 660,000 workers from staff, bringing total losses since the recession began to 5 million, the biggest slump in the postwar era.

Evaporating jobs and declining pay mean President Barack Obama’s pledge to create or save 3.5 million jobs through tax cuts and government spending may fall short of what’s needed to revive the world’s largest economy. Federal Reserve Chairman Ben S. Bernanke has conceded joblessness could top 10 percent under a worst-case scenario.

“The unemployment rate is not done rising and the gain in March won’t be the last,” said Stuart Hoffman, chief U.S. economist at PNC Financial Services Group Inc. in Pittsburgh. “With jobs still declining and incomes being squeezed, consumer spending still looks quite weak.”

[SpiralHawk]

1. "Among my many parting gifts for you Americans. Smirk." - XCommander AWOL (R)

"We Republicon Homelanders decided to leave you Americans with a big, steenkin pile of Shock & Awe. Smirk."

- xCommander AWOL (R)

[pinqy]

2. The Official Report is out

Non-farm payroll employment down 663,000, and the Unemployment Rate up to 8.5% from 8.1%

http://www.bls.gov/news.release/empsit.nr0.htm

[Liberal_in_LA]

3. OMG... how many jobs can the US lose?

[notesdev]

5. Potentially: ~110 million; ideally: 535 - nt

[notesdev]

4. That's the U-3 figure, which is irrelevant and pointless

The U-6 figure is the one to pay attention to, it doesn't exclude large classes of unemployed.

U-6 is at 15.6%, which is the number to be paying attention to. U-3 is a farce, the only people in whose interest it is to measure it are politicians who want to claim a lower unemployment rate than the actual.

[pinqy]

6. What you meant to say ...

Is that the U-6 includes a large segment that was never included as "unemployed" until 1994 and also includes some employed.

The U-6 is useful, but it is waaaaay too subjective to be of actual use.

The U-3 is preferred world-wide by the majority of Economists/Statisticians because it's objective, based on what people are actually DOING rather than what they say they would do.

I started a thread Which Unemployment Rate? explaining the realities from someone who has studied and worked with these numbers for a decade (me).

[notesdev]

7. Given the flaws of the BLS model

I really don't see how you can state with any confidence that the U-3 number is more reliable than the U-6 number. Both are just estimates, and given that the BLS itself admits its model is bunk at economic turning points (i.e. the present), waving U-3 around like it is authoritative is misleading at best.

[pinqy]

8. Which flaws are you referring to?

The U-3 is more objective than the U-6. That's a given and I don't see how it could be argued. Of course they're estimates, that's what surveys are. I'm not aware of BLS saying the Unemployment rrate is "bunk" for turning points, though certainly the Establishment numbers for Employment are a lot more questionable (because the birth-death model probably doesn't hold).

During times like this, we should (and do) see an increase in the marginally attached, especially the discouraged. And that's very important to look at. But you have to be careful because it relies on both the individuals perception of the market and on how the respondent feels about admitting his/her own flaws and motivations. If someone says they're not looking because they don't believe they'll find a job (discouraged worker) is this true (or an excuse for not looking, possibly self-deception), and is it relective of the actual market conditions (or is their belief mistaken)? And for the overall group of Marginally Attached (not looking currently but did look sometime in the last year) do they really want a job or is it more a vague "it would be nice to have one, but not worth the bother?" Many people whose spouse makes enough to support the family, or others who don't truly need an income can fall into that latter category. Is that significantly different from someone who states they don't want a job?

The U-3 counts those who are really trying, but failing to find work. That's the most objective measure, despite often large errors.