The unemployment spike reported in the US today seemed odd since the payrolls did not drop that much. Does anyone have any insight as to why? I was too busy worrying about oil to figure it out today.
CFA theory… Isn’t this the anomoly that occurs when the economy turns upward? People see better prospects and begin looking for work again.
Or as the case may be… no more home equity loans so it’s time to get a real job?
unemployment rate = # of unemployed / labor force Both of those numbers can change. The rate changed because of a large increase in the labor force. Also pay attention to to the birth/death statistical adjustments. Anyone really believe the financial sector added 9,000 jobs last month? edit: I know that math doesn’t make sense, but that’s the reason. I think my rate calculation is technically wrong.
for one they are based on different surveys. the payrolls numbers is based on a survery of employers, while unemployment is some sort of individual survey. also, as our naked friend mentioned unemployment numbers around this time of year get distorted a bit by teens and college kids entering the work force for summer. this month’s print was really driven by a large increase in the number of unemployed people as opposed to a decrease in the number of employed people. sort of makes sense that it didn’t jive with the nonfarms # if you think about it like that.
With all the fresh college grads now looking for work this might be a good chance to see if this is seasonality in action.
I feel so bad for those kids. Graduating in 2007 was hard enough. I can’t imagine graduating in 2008.
I can’t imagine I had high hopes of landing in finance after Dec’07 CFA test.
The unemployment number only includes people who say they are looking for a job. Lay-off someone from BSC and then he gets a call from the Labor Dept. If he says, I have no job but I’m hanging out in the gym for a month before I do anything about it, he’s not unemployed.
It’d be very interesting to see statistics (if they reliably exist) on how many have given up or are under employed (both of which could be subjective).
I think its the Bush theory: the spike in unemployment means that recovery is just around the corner. Its bears making a last desperate push to overcome our mission of prosperity.