Friday, May 4, 2012

Employment April 2012

As usual we start with the Romer curve. By this time we should have been well below 6% as per Romer. Not close.
The above shows the difference from Romer, and as we see it is growing.
Finally the variation in percent, sustained at highest level.

Conclusion, the economists who "solved" this problem in 2009 were seemingly clueless based upon results.
Now above we have the stated unemployment and the unemployment if we had the same percent of population in the work forces as of June 2006. We are at 8.1% but using 2006 data and adjusting for population growth we are at 12.8%. There has been a very weak decrease in unemployment if at all from the adjusted levels. This to me is the major concern. We thus fail to get tax revenues from this base and we also pay them benefits. This is one of the major reasons for the deficit growth.
The above shows what now appears to be a structural employment deficit. Namely we have employment growth ticking upward somewhat with population but the drop shows no signs of ever closing. It appears as if we will have this long term "lost" group of employees.
This is best evidenced by the above where we show workforce as percent of population. It has dropped and is still dropping. Frankly that is the way Government keeps unemployment low by driving people out of the workforce.

I believe we will be facing a growing structural change and this must be fixed if we are to ever correct ourselves.