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But we are not in a recession,,,

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bluerum Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Mar-07-08 11:12 PM
Original message
But we are not in a recession,,,
From the NY Times

As stated in the article, the dip to 4.8% for the unemployment rate in Feb. is due to unemployed people no longer looking for work.

Even the one apparent piece of good news in the employment report was a mirage. The unemployment rate fell to 4.8 percent, from 4.9 percent in January, but only because more people stopped looking for work and thus were not counted as unemployed by the government.

Over the last year, the number of officially unemployed has risen by 500,000, while the number of people outside the labor force neither working nor looking for a job has risen by 1.3 million.




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whistle Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Mar-07-08 11:22 PM
Response to Original message
1. That is because it is a stagflation recession where hundreds of billions of dollars
...are being dropped into the economy to cover up the fact that the U.S. economy is in meltdown
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GOPBasher Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Mar-07-08 11:23 PM
Response to Reply #1
2. You're very right. I don't see the end of this anytime soon. n/t
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bluerum Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Mar-07-08 11:24 PM
Response to Reply #1
3. And who is dropping all that cash into the economy?
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Taxmyth Donating Member (990 posts) Send PM | Profile | Ignore Sat Mar-08-08 12:17 AM
Response to Reply #3
4. Pot prices coming down
A lot of new faces out on the streets
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DemocratInSoCal Donating Member (402 posts) Send PM | Profile | Ignore Sat Mar-08-08 12:22 AM
Response to Reply #3
5. Helicopter Ben nt
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 01:09 AM
Response to Original message
6. unemployment is a LAG recession indicator
Unemployment is a LAG economic indicator, it tells you want the economy was doing THREE MONTHS AGO. It takes a while for a company to close down do to the recession, or even to close a factory (Or a store), thus people do NOT get laid off for about 3-6 months AFTER the company has suffered an economic loss. For this reason, unemployment is NOT looked at by economists to see how the economy is going, for all unemployment shows is how the economy was going three to six months before.

What economists look at are the Sale of "White goods" i.e. expensive household items and automobiles. Basically if an employees feels he may be laid off within the next year or so, and his refrigerator (or stove, or Furnace, or other major appliance, which includes Automobiles) breaks down and he or she has to choice between buying new or repairing the old, an employee facing a lay off will go for repairing what is broken and hope it last to when things are better. On the other hand if the employee is secure in his job, he or she opts to buy new, on the grounds he or she will NOT have to worry about it breaking down in two to three years.

This has been known to decades (and there are records of economists in the 1800s using white good sales to see how the economy is going). This was well established by the time of the Great Depression. What you look at is the sale of white goods and automobiles NOT unemployment to see how the economy is going. The media does NOT push this the last few years for the economy has been in a recession for quite a while if you look at the sale of white goods. The old rule of thumb was three months of sale declines in white goods, meant you were in a recession. One or two months just some bad time but the economy might pop back up, but three months was a kiss of death.

As to unemployment, no one looks at that except on how to get it down. Unemployment indicates what the economy was doing three to six months AGO, thus these unemployment number reflects how the economy was doing up to and in the Christmas rush. It was bad then, so unemployment is bad now. You had sales close to Christmas that saved some retailers from bankruptcy (and some jobs today) but as a whole NOT a good economic outlook.
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bluerum Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 11:16 AM
Response to Reply #6
8. Put white goods, employment, gdp and housing stats together and you
have a grim picture.

The way that they massage those employment numbers always takes my breath away. Historically, 5% unemployment does not sound so bad. But in context of the trend over the near term (last 8 years), even the "ab-normalised" manipulated data indicate remarkable weakening of the economy.

If people do not have jobs, they can't buy white goods and cars. They won't go on vacation and they won't be able to pay their mortgages or rents.

The economists definition of a recession, three consecutive months of negative or flat gdp does not mean a hell of a lot to someone who has no job. My feeling is that this lying mal-administration will exert political pressure on any and all source of economic data to manipulate the numbers anyway.

The bottom line is that as soon a dem is elected to the white house the press will report a deep and long lasting recession.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 02:45 AM
Response to Original message
7. Interesting statistics. Is the fall of 45,000 in the labor force unusual
Edited on Sat Mar-08-08 02:47 AM by Ghost Dog
(seasonally adjusted) for the time of year?

These are the BLS labor force numbers, seasonally adjusted, over time:
source (java): http://data.bls.gov/PDQ/outside.jsp?survey=ln


edit: Note that the unadjusted numbers for the last year are as follows:
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bluerum Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 11:38 AM
Response to Reply #7
9. Don't know dog. I look at those bls charts and see labor force that is rising
Edited on Sat Mar-08-08 11:39 AM by bluerum
in proportion to the population. The labor force surges a bit around Nov./Dec. and contracts a bit in Jan./Feb. This makes sense if people drop out of the labor force until the next seasonal hiring cycle.

But again, this is the labor force, not employment. I find the idea that you don't count people who are out of work and not in the labor force in unemployment stats very misleading.

A simpler statistic would be working people and non-working people. IMO complicating the indicator with a variable definition of who is eligible to be counted in the indicator reduces its credibility.

My focus is the consistent decline in non-farm payroll over the last year. This should be a component in the formal definition of economic recession.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-08-08 03:06 PM
Response to Reply #9
10. Yes, the payroll numbers look clear. It's the headline percentage
Edited on Sat Mar-08-08 03:19 PM by Ghost Dog
that looks manipulated by means of the dodgy labor force figures, I reckon.

I know the (continuing) redefinition of "looking for work" is referred to in shadowstats and elsewhere; I recall the discussions about it when Reagan and Thatcher started gaming those numbers - and the process has continued, increasingly undercounting, under successive US Presidents and UK PMs since then (with somewhat more genuine stats in the UK since long-term unemployment benefits are for real - but if you turn down a ridiculously crappy job offer, you're out).

One corollary, I guess, will be more people working 'under the table', but even so, the negative trend in US employment (even without taking quality of jobs into account) is very clear. Just one more gaping crack in the rapidly crumbling edifice...

ed. BTW my stoopid mistype above. The labor force was said yesterday to have contracted by 450,000 in January.
So if it really did contract by 1.3M over the year, and 0.45M of that occurred in January alone (not that I see that clearly reflected in the data above) then that's surely a sudden and significant discontinuity, it would seem (or an over-zealous fixing of the figures). In any case, of those who 'leave' the labor force, a few will already be very comfortably off (they think); some will be coping somehow in the 'alternative economy'; many will be struggling and many will be suffering greatly. Some may be US citizens abandoning the country and immigrants heading for home.
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