The Rev

Today, the Bureau of Labor Stats released its national unemployment rate figures, and for the first time in 15 months, the rate is lower than the previous month. In May, it was 9.4%; in June, 9.5%, and now in July, it's back to 9.4%. It isn't much, but since unemployment generally only begins to rally at the end of a recession, it bodes well.



The graph above shows the unemployment rate superimposed over recession periods, which are shown as gray bars. In every case, the unemployment rate did not turn down until the end of the recession. Sometimes it continued upward, but it never turned down.

Thought this might be of interest.



The Rev

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Kompressor

Interesting, too early to tell imo.

It is a good sign though.

Nice find Rev.

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Think like a man of action, act like a man of thought. -H. Bergson

Being

i agree, great find, but I would give it another month or two. unemployment rates are always said to be the last thing to recover after a recession

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R.I.P. Gov

José

definitely too early to tell if I had to guess.

Bearsy

Sure ain't helping me

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The Rev

The Conference Board's Index of Leading Economic Indicators, which is a pretty good gauge, historically, of when we are exiting a recession, has been on the uptick for the last few months as well. In every other recession in which this data were gathered, this has signalled the recession was drawing to a close.

It's not as good at predicting when a recession is coming however. It always dips at the beginning of a recession, but a recession doesn't always begin when it dips. That's why economists are fond of saying that the L.E.I. has accurately predicted nine of the last five recessions.



The Rev

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Ego Tripping

It's going to bounce for a while, just ride it out. We're in some new lands now. The status quo is going to need to be re-defined.

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4nik8

Agreed that it's a good sign but I wouldn't read too much into it.

From the WSJ, an insightful look at how the numbers work:

"The unemployment rate actually fell in July, hitting 9.4% from 9.5%, even as the economy lost a quarter of a million jobs. Does this signal the peak for the jobless rate? Will the talk of 10% unemployment end? Not necessarily.

The payroll figures — jobs lost — comes from a Labor Department survey of employers. The unemployment rate is measured through a separate survey of households — asking people whether they have a job, whether they want a job and whether they searched for a job (among other things). If people drop out of the labor force, the unemployment rate can decline because fewer people would be considered jobless.

The July household survey showed the civilian labor force shrinking by 422,000 and employment falling 155,000. That translated into 267,000 fewer people listed as unemployed. The labor-force participation rate fell 0.2 percentage point in July to 65.5%

The unemployment rate improving while payrolls continue declining is hardly unusual. It happened several times during and after the 2001 recession, most recently in August 2003 when joblessness declined to 6.1% from 6.2% while the employer survey showed a decline of 42,000 jobs.

When the economy recovers, more people are likely to reenter the labor force looking for jobs. People who decided to return to school during the downturn, for instance, would eventually return to the job search and help push the unemployment rate higher. (The government’s broader jobless rate declined a fifth of a percentage point to 16.3%. But its still-elevated level signals how many people want full-time jobs but stopped looking because they can’t get one.)

The payroll measurement is a coincident indicator, tracking current conditions in the economy. But the jobless rate, as a lagging indicator, is likely to resume rising even as the economy recovers and employers start adding jobs. So 10% unemployment isn’t out of the question."

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