As described in last week's post Unemployment: Even Worse than the Headlines, has the labor force not decreased over the month, unemployment would have jumped to a level higher than 9.8%
But how uncommon is a shrinking labor force? This is the first year over year decline since the early 1960's.
And why wouldn't individuals stop looking for a job. As the chart shows below, the number of people who have been unemployed longer than half a year has spiked to record levels.
And the long-term implications via Alan Greenspan.
"People who are out of work for very protracted periods of time lose their skills eventually. What makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and, in one sense, an irretrievable loss."Source: BLS
Jake - nicely done and VERY pointed.
ReplyDeleteNow that I've sold you on YoY can I sell you on smoothing? In fact on monthly data I like 3MoMA in the background and non-linear trends as the foreground dominant to really drive it home. Not lecture gdad on graph-sucking, or crafting :)!
BtW - if you're interested in the LT outlook, jobs and what the implications are may I share:
http://llinlithgow.com/bizzX/2009/10/refreshing_the_economic_outloo.html
p.s. - any newsletter feedback to share?
Shrinkage is bad in any and all settings, just my opinion.
ReplyDeleteI believe every administration has done their part to hide their lack of performance with resprct to employment. And if I'm not mistaken, this leaving the workforce nonsence was Clinton's contribution. I suggest you start reporting the Shadowstats.com metrics where John Williams attempts to hold the government metrics to their original definitions.
ReplyDelete