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Unemployment: June Projection and a Dire Warning of Posts to Come June 30, 2009

Posted by geoff in News.
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The official unemployment numbers for June should be out on July 2, but Bloomberg compiled an estimate for June based on inputs from 58 economic experts. Their composite prediction was that unemployment would increase by 0.2% in June. Last month they predicted 0.3%, and we got 0.5%, but they were dead on with their April guess. We’ll see how they do this month.

In any case, here is the unemployment vs. stimulus graph, updated with what people think the BLS will say in a few days:

Stimulus-vs-unemployment-june-proj-dots

Of course, by now the Obama administration has acknowledged that their initial predictions for the effectiveness of the Stimulus plan were crazily optimistic, but they have mistakenly blamed it on the Bush administration (“the Bush economy was worse than we thought”). As has been pointed out many times before, from the time of the bill’s passage until early June, they claimed that they fully understood the problem and that the Stimulus was working, even though no money had been spent.

I think that none of us believe that spending $787 billion will not create some employment – it certainly must. The question always was: how much benefit will spending the money have compared to the natural cycle of the economy? The answer, I think, is not much.

I’ll apologize in advance for going “all economy all the time” over the next few days, but I got a green light from the other bloggers here to do just that. So tomorrow I’m going to take a look at a second set of predictions from back in January – the Stimulus-supporting predictions of Moody’s Economy.

Gird thyselves.

Comments»

1. Retired Geezer - June 30, 2009

*Geezer composes a mental post*

Geoff? Oh yeah, I knew him before he became famous.

Keep up the good work.

2. Russ from Winterset - June 30, 2009

Never apologize for kicking ass, geoff. Because you ARE kicking ass. It’s ass that needs kicking, and you’re just the man to kick it properly.

3. Mrs. Peel - June 30, 2009

^ what Russ said.

Hey, on the bright side, does it look like the first derivative is getting a little smaller?

4. Dave in Texas - June 30, 2009

But, what about the fiscal year??

5. Michael - June 30, 2009

What happened to the triangles?

6. Edward Von Bear - June 30, 2009

Can we consider using rhomboids?

7. Pupster - June 30, 2009

Imagine how much worse this would be without the 2 bazillion jobs created or saved by the stimulation of the stimulus.

8. Nancy Pelosi on a peyote bender - June 30, 2009

Every day, 500 million American jobs are being saved by the Stimulus.

9. Dave in Texas - June 30, 2009

I saved a ton of money switching to Geico with the stimulus plan.

10. geoff - June 30, 2009

Hey, on the bright side, does it look like the first derivative is getting a little smaller?

I’d like to believe, but they fooled me with that last month.

11. Correction to the May Unemployment Chart « Innocent Bystanders - June 30, 2009

[…] Correction to the May Unemployment Chart June 8, 2009 Posted by geoff in News. trackback [UPDATE: The chart has been updated with the prediction for June here] […]

12. Dave in Texas - June 30, 2009

Study: More frequent sex can make your sperm stronger?

http://news.yahoo.com/s/ap/20090630/ap_on_he_me/eu_med_sperm_damage

I’m not sure I buy it. If that were true my sperm would be able to bench press 280.

or do you think they mean sex with a girl?

my stimulus plan has created or saved 850 million sperm cells.

13. wiserbud - June 30, 2009

Raise your hands if you support to never, ever, ever reading another word about DiT’s sperm anywhere ever again.

…120, 121, 122…

Okay, all opposed?

*Put your hand down, Rosetta. Only sober people get to vote here.

14. daveintexas - June 30, 2009

Well, okaaaaay. Technically, my sperm have not been released into the wild since 1991.

15. wiserbud - June 30, 2009

So, you plan to simply ignore the results, do you?

RIOT!! STORM THE SWIMMING POOL!! WHERE IS OUR VOTE??!?!

Dave = AhmadinagooberInTexas

16. skinbad - June 30, 2009

I think we’re going to need a Dire Warning tag.

17. doc - June 30, 2009

where’s the NSFAA tag – that’d be not safe for anyone anywhere.

18. B. H. Obama - June 30, 2009

So, how many jobs saved or created are we at?

19. Edward Von Bear - June 30, 2009

^well, you did save the Mullahs’ jobs in Iran, but you couldn’t keep that tinhorn in Honduras, so you are at net zero.

But I bet you will claim it as a positive.

20. Cathy - June 30, 2009

Porkulus! Stimulus!
Just fried some up BACON, and feel much better about things, just sayin’

21. Michael - June 30, 2009

BTW, Geoff, the economic bellwether that ranks right up there with unemployment is business bankruptcies. Did Team Obama make any predictions about that?

22. lauraw - June 30, 2009

the economic bellwether that ranks right up there with unemployment is business bankruptcies.

*SHUDDER*

For the Obama people, more of those are a feature, not a bug.

Michael - June 30, 2009

It is indeed scary out there. I was just listening to a presentation from our executive team where one guy mentioned that weakness in our revenue stream correlates almost perfectly with both unemployment and business bankruptcies, and the latter has skyrocketed as well as the former.

23. Will - June 30, 2009

And to think he’s probably relaxing on the river, working on his tan, with a cold beer in hand. (or was that gonna be tomorrow?)

24. Dave in Texas - June 30, 2009

It’s anecdotal, but I’m pretty sure the deal we worked on my kid’s car is largely cause they’ve had it on the lot since April.

25. Joey Buzz - June 30, 2009

San Fran Nan is now saying that the Cap and Trade bill is all about “Jobs, Jobs, Jobs”, I guess that she will be saying that about Health care “reform” next.
Team 44 seems to be trying their best to save Honduran ex-President/Dictator Manuel Zelaya’s job.

I still dont care for the labeling on the x axis of this graph. How may Qs are there in a year? Or do 4th Q numbers not get reported? Pardon my ignorance in regards to all things economic and other stuff.

26. lauraw - June 30, 2009

I still dont care for the labeling on the x axis of this graph. How may Qs are there in a year?

*facepalm*

27. nicedeb - June 30, 2009

How much longer do you think they’ll be able to blame Bush for this?

28. Mr. Matamoros - June 30, 2009

Where are the trolls and the drive-by wankers? I come here for the posts but stay for the smack-downs…

29. Edward Von Bear - June 30, 2009

27: as long as there is an “enchanted media”

30. Joey Buzz - June 30, 2009

Laur, do I need a /sarc tag or is your *facepalm* directed towards Team44’s graph design team….? Perhaps they could have just left off the brackets…they made it look like each year ends with Q3 and that Q4s are in some limbo between the years….or maybe I get too literal with a buzz on…

31. lauraw - June 30, 2009

No, sorry Joey, I seem to remember geoff going over this issue with some other folks before, IIRC.

32. Mrs. Peel - June 30, 2009

I once asked how many quarters were in a lacrosse game, so, uh, yeah.

They just designed it badly, Joey.

33. Michael - June 30, 2009

Geoff is right not to alter the original chart in any way, even to correct it’s shortcomings. It has to be unequivocally attributable to Team Obama.

34. geoff - June 30, 2009

Cleanup on Aisle 33.

Yes, Joey, the abscissa sucks and caused me no end of confusion. Just ignore the brackets and press on.

35. Joey - June 30, 2009

There is still time people. Look up Lyndon Larouche & listen to reality.

36. joeeey - June 30, 2009

There is still time people. Look up Lyndon Larouche & listen to reality.

37. MostlyRight - July 1, 2009

Two questions:

1. Geoff – To your knowledge, is there a way to factor variables like shorter hours, reduced benefits, reduced pay, etc into unemployment figures. I had a discussion with a friend who is an owner of a medium sized engineering firm here in Phoenix. They let 13 people go, but also all took reductions in benefits, some hourly workers switched to 3 or 4 days a week, and salaried employees took 10% – 25% pay reductions (the higher paid took the largest reductions) and are working ridiculous hours…just to keep the firm afloat. The employment numbers on their own are scary, but with these variables factored in we’d see a more honest view of the situation the economy is in.

2. Russ from Winterset – Did you kick a Canadian in the nuts today? Loved your post yesterday…read the whole thing aloud to my wife, and for the first time in my life, she let me finish every last word.

38. geoff - July 1, 2009

To your knowledge, is there a way to factor variables like shorter hours, reduced benefits, reduced pay, etc into unemployment figures.

There are some stats for “underemployed,” but I don’t trust them much – they’re not very specific.

39. pajama momma - July 1, 2009

YAY Lydon Larouche! He really does sound like the voice of reality.

The most common criticism of LaRouche is that he is a conspiracy theorist. Also, due in large part to LaRouche’s campaigns against Zionism in the 1970s and Neoconservatism beginning in the 1990s, LaRouche has been accused of Anti-Semitism.

course, I’m sure none of this is true, wikipedia must be run by Jews is all

40. Mark in NJ - July 1, 2009

Congratulations, Geoff – you scooped the NYT by 1 day!:

http://www.nytimes.com/2009/07/01/business/01leonhardt.html?_r=1&hp

41. geoff - July 1, 2009

Would’ve been nice if he had written that article back in January.

42. Oh Frabjous Day!! Unemployment Rate Increases by Only 0.1%!! « Innocent Bystanders - July 2, 2009

[…] unemployment rate for June only went up 0.1%; much less than in previous months, and finally deviating from the near-linear increase we’ve seen since last […]

43. Madison County Republican Party of Indiana » Pence: Congress Should Follow the Example of American Families - July 2, 2009

[…] See also: Unemployment: June Projection and a Dire Warning of Posts to Come […]

44. CCPhysicist shows correct June graph - July 2, 2009

The fact is that the economy was much worse than anyone thought, and the flaw in that graph and the projection was that the STARTING value for Q1 of 2009, the point where the two curves where predicted to start to diverge, was wrong by a huge amount.

It is true that “their [Obama team] initial predictions for the effectiveness of the Stimulus plan were crazily optimistic”, but this was mostly because they were crazily optimistic about the effect of the Bush administration actions in the Fall. They were projecting that we were already past the inflection point in unemployment by Q1. This was wildly wrong.

Where you err is in assuming that the Obama team and the independent team led by Bernanke were only talking about the Stimulus Bill, most of which will not begin to show up until later in the third quarter. What was working in the second quarter was the Paulson and Bernanke action in the fall, and its effect was to change the second derivative of unemployment from scary positive to zero or, we can hope, slightly negative. They just didn’t want to give Bush credit for following Bernanke’s and Paulson’s advice.

Feel free to use my newest graph in your analysis of what others were saying back in January. It includes a minor correction to the linear projection that shows how optimistic they were that a recovery was already in progress in January and a credit to my addition to the graph.

By the way, I think it is a good thing that no one but the major economists working on the problem in Fall 2008 projected the potential for a depression, and really good that they never showed a graph of what the economy was actually doing. (That would have guaranteed a panic and a depression.) My version of the graph shows that curve in pink. Imagine that being presented in January! Yet that is what I knew had to be happening based on our local situation.

45. Unemployment Rate increases by only 0.1% « Law Of Increasing Conservatism - July 2, 2009

[…] may be happening at last.   The unemployment rate for June only went up 0.1%; much less than in previous months, and finally deviating from the near-linear increase we’ve seen since last year. "I guess […]

46. BizzyBlog » Stimulus Judgment Day 2: The June Employment Situation Report (070209) - July 2, 2009

[…] 10:30 p.m. — The graph at Michael’s Comments/Innocent Bystanders has been […]

47. yennhile - July 3, 2009

Are you sure all these data came from DoL? Reports from the local workforce commisions at state level are more accurate.

48. How’s that stimulus working out for you Barry? « Political Byline - July 8, 2009

[…] According to what figures? Because the charts I have seen, say otherwise: […]

49. Dave in Texas - July 8, 2009

#47 You’re right. The Dept. of Labor is probably just dicking around.

50. The Island of Logic » Obama mania runs into reality - July 9, 2009

[…] Obama’s approval is bombing like an Al Franken joke. Today’s Rasmussen Daily Presidential Tracking Poll show Obama’s Approval Index at a -5. Looks like the mania just ran headlong into the wall of reality.  With job loss on the rise despite the 1.24 Trillion Dollar Stimulus, investors who say the economy is getting worse jumped from 43% before the jobs report to 51% today. (Source: https://michaelscomments.wordpress.com/2009/06/30/unemployment-june-projection-and-a-dire-warning-of-…) […]

51. Glenn Beck: President Obama a racist--he hates white people - Page 2 - FlyerTalk Forums - July 29, 2009

[…] Originally Posted by D1andonlyDman No matter how you slice it, by ANY objective measure, the nation is in VASTLY better shape than it was 6 months ago when Obama inherited the worst basket case economy of the last 75 years. Only the worst sort of delusional partisan hacks could claim otherwise. The financial markets have turned around from the worst drop in 75 years, the housing market has finally started to recover after the worst 3 year stretch in history, and we finally have a foreign policy that is coherent and based upon something other than enriching the oil industry. Reality begs to differ. […]

52. The Fairy Tale of Obamanomics Has an Unhappy Ending : America's Right - January 11, 2010

[…] his admission is showing us something we didn’t already know. Here’s a graph (this version from the Innocent Bystander’s blog) that I’ve seen all around the web in the past couple of weeks. It shows that the actual […]


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