Unemployment

[2002BRAM]

Great!

[wadams19]

ahh i totally asked the question about services economy in comment to a prior video. get out of my head! :)

[az9az9az9]

In Estonia we have same tend to make it look better than it really is.

We have soo called "registered unemployment" 14,6%. But same time many people have lost temporary status to be counted as unemployed.

Unemployed non students in working age 15-64yr is 30,7%

14,6 -VS- 30,7 %, pretty nice right :-)

[Hudson4351]

What is the difference between U2 and U3? What is the BLS definition of a "job loser"?  What's the difference between a "job loser" in U2 and an unemployed person from U3?

[bobbobmarley27]

@MrExtramoney u cant...but u can play and beat economy

[michaelaccounty]

Thank you very much.

[anonymous915]

Sounds like my experience in the early 80's - we were laid off so many times we didn't know if we were coming or going. When GE was hiring, I asked if they expected a layoff anytime soon - "No, not for a LONG time" the interviewer said. 6 mo. later I was looking for work...again. Interesting what they consider to be a "long time."

[thoughtchallenge]

If there is a silver lining it would be that these examples you give all indicate a spike pattern. Just like gasoline hitting $4.35/gallon, the unemployment/underemployment rate may hit a peak and drop off just as dramatically.

[thescepticus]

OBSOLESCENCE

"Pipe Made in India Incenses Illinois Town" - NY Times 16/4/2009

From Mish's GETA blog

This is not just a steel issue. I am talking about flat panel TVs, steel, copper pipe, appliances, cars, electronics, underwear and damn near anything one can make. The days are gone where someone can be paid $40 an hour, $30 and hour, or even $20 an hour with enormous pension benefits at retirement.

[schmokay]

Its not clear if someone employed part-time for economic reasons, could not mean a woman who was previously a homemaker who had to return to work for economic reasons. The other thing that you alluded to is the unemployment number dont capture underemployment. By that I mean someone who could not find work as an accountant an takes a full time job at the local department store.

[martinw767]

Great explanation, thanks.

[Dirty420South]

Great Job Sal.  Hopefully, this video will help people realize how the 8.5% rate is a mere fantasy.

[dhukkaman]

Sorry but both yourself and Mish have merely demonstrated that you don't understand how to calculate numbers or rates of growth. U6 is clearly NOT growing faster than U3. Of course the gap between two numbers will get wider even when they increase in proportion to each other if the start point of one is higher than the other.

[khanacademy]

You are correct that the ratio of u6 to u3 is not increasing (or that U6 is not growing faster in % terms), but clearly more people/month are being added to the u6 group than the u3 group which tells us that u3 will more and more understate the "real" unemployment numbers as things get worse. At also tells us that of the 91.2% employed rate based on u3, more and more of those people are not full-time.

[ruskylinee]

thank you sooooooooooooooooooooooooooooo­oooooooooooooooooooooooooooooo much. we really appreciate

[khanacademy]

Also, if you prefer ratios and % changes, the employment rate as measured by u6 is a smaller number than the employment rate as measured by u3, but it is decreasing by a larger number and a larger % and the ratio of (employment rate as measured by u6)/(employment rate as measured by u3) is decreasing at an accelerating rate.

[cameling88]

@khanacademy

Where did you find the screen shot you took? I would like to find the page. I've been looking but can't find it.

[dirkcjelli]

U6 still discounts the mentally ill and those in jail. Perhaps a few other things.

[Hursty29]

I think it's important to note that U6 and U3 are growing in proportion though. Both are growing at the same rate in proportion to each other, while the gap might be larger nominally they're still almost the exact same proportion as they were in Jan 08.

[mongobobo]

So don't buy gold for a little while yet.

[ad2181]

Nice, I like when you include "engineers" in your anaylsis. Sadly,most Americans don't understand the many fields and sub-field of engineering. They think this stuff falls fom heaven. I think the fan and hit the sh*t.

[thescepticus]

The only way to get out of this Obsolescence is to create new industries, just like we did it back in 80's & 90's, that would hire the MASSES. If we can not create new competetive industries this Obsolescence is here to stay. We need investments in retraining of the obsolete workforce.

[ElvisWoods]

are you Obsessed with Obsolescense, and what's with all the CAPS...

[thescepticus]

Most of the US industries are going through their obsolescence phase. Textiles, Consumer Electronics, Software, Chip Manufacturing, Computer Hardware, etc. US Auto and Financial industries are obsolete now as Koreans (Hyundai Genesis - Car of the year) Indians and Chinese provide replacements that are superior.

This is Obsolescence not Unemployment.

[thescepticus]

Obsolescence is the state of being which occurs when a person, object, or service is no longer wanted even though it may still be in good working order. Obsolescence frequently occurs because a replacement has become available that is superior in one or more aspects.

[mattlopezvegas]

we're screwed

[ChewyWiener]

I got such a bad grade in macro economics, thanks for your lessons!

[mrcool011]

I read that if unemployment was tallied like it was during the great depression it would be around 20% now...the high in the great depression was 25%. I think we'll hit 25 or more this year or next.

[Melville10]

Unemployment is probably higher because it isn't accounting for the underemployed and those off unemployment.

[thescepticus]

Bloomberg News "Deflation Dead at BlackRock; Inflation Debt Favorite".

At BlackRock Inc., Vanguard Group Inc., PIM Co. and Pictet & Cie Banquiers, concerns are growing that policy makers will struggle to control inflation once economies start to recover.

[Durchbrechen]

I did read that this morning and I got anxious, being a deflationist bear. khanacademy calmed me down :)

[MalaTemporaCurrunt]

wtf... 8:30 ... after 9/11 employments grew?!?

[Durchbrechen]

fellow countryman, that's the unemployment chart.

Hence employemnt sank from 01 up till 03, then soared till 07. It matches stock indexes quite well.

[pongman]

Ok Sal, you've given us all this information now let's pretend you're the president. What's the solution? lol I do recall your solution to the banks where we open up new banks and not bail out Wall St. but do you think it will still work? I wonder what the repercussions would be if AIG and the others went bankrupt. This situation bears woe for me as an inventor; now I don't know if P&G will buy my invention and they really like it. I need to think of something for the unemployed.

[norwayte]

A good describing of the problem is not healing the problem. The best and worst is still to come.

[dubbleplusgood]

norwayte - the first step to resolving any problem is to properly identify what the problem actually is. Otherwise you have no direction.

I have seen some on TV mention this higher UI rate before, but it's rare tp hear anyone speak honestly about the economy.

[norwayte]

Yes. And But. There is always a danger to care about the symptoms of a disease - instead of the disease. Unemployment rates are symptoms of something much more deeper. Do not try to heal the symptoms. It's dangerous. Think of human diseases and there symptoms. Care about symptoms can be distracting. Heal the disease.

[clerlic]

Wow, that's one clear explanation and I don't know anything about economics!

Thanks!

[lvecsey]

I think some of those years 04 05 and 06 where people were more employed has an artificial aspect as well. I say this because I remember walking into my local citibank at the time and there were soo many extra employees just standing around idle. It was pretty insane actually. It corresponds with the explosive growth of real estate and everything related to it.

I guess at times like that it makes sense for companies to higher extra folks, for tax purposes, even if they aren't doing much.

[shakaama]

None of the statistics include any independent contractors i.e. realtors and housing people... etc

That number is huge and growing.

[quincy451]

I wonder how the current conditions compare to the great depression. I know here once again we are seeing failure on a great scale. The last recession as I recall having lived through it was not like that.

[hideflolife]

Sal, again great video - but I'm still struggling with how they decide "discouraged workers". "marginally attached worker" or "part time for economic reason" - how is this survey taken? Is it a form that people fill in? How accurate is this info?

hdll

[Y3rMawm]

I like Mish's site. He has a great chart on the 16 signs of a deflationary environment.

Did we not U6 data or was the criteria changed, to produce a "better" answer (like with CPI, and hence GDP)?

How does this compare to unemployment measures used/reported during TGD 1.0 years. We had ~25% peak back then. Which U*, if any was this based upon?

[djtakagi]

Thanks for the Videos Sal, this kind of stuff is just not explained on the news. I was watching the videos you had on inflation and was wondering when the fed tries to reduce the money supply when the economy heats up how will this be done? Open market operations? if so wont that cause a flood of government securities into the market -- can't this be bad? isn't this going to be a problem?

[stellaconcepts]

inflation will occur in the US when the dollar is dumped. Sheer supply demand. Nothing to do with utilization (in this case... granted it makes sense in other economic cycles, but not this one).

Thanks for the vid.

[toosinbeymen]

Thanks so much for this information, khanacademy. This breaks down the unemployment number we're given all the time and brings to light how incomplete it is.

You've just gained a huge fan.

[siggyboss]

Sal, Mish and I have debated the inflation/deflation issue. However, we both agree that it's incredibly bad having a fiat currency, which isn't backed by anything.

[nuprincenj]

DUH!!!!!!!