How tough is it to find work?

Yahoo News has put out an interesting article today that puts into perspective just how hard the 14 million unemployed Americans are having finding a job. Not only are they competing with other unemployed folks for open positions but also almost 9 million underemployed folks who are looking to switch from unrewarding part-time jobs into meaningful full-time employment. Additionally, both segments have to fight against people with full-time work that are looking to switch jobs or employers. With the nation's unemployment rate holding steady at 9.1% and the European situation getting worse, many companies are getting slightly more cautious as they see the current turmoil causing increasing uncertainty and therefore, they are a little more hesitant to invest new capital or to create new jobs. Many people are even running out of unemployment benefits after their 99 weeks have run out. How difficult has it been for you to find work?

Trucking Jobs have Dropped During the Recession

The >Bureau of Labor Statistics has recently issued a study that shows how employment in the truck transportation industry has dropped from 1.45 million jobs before 2008 to about 1.25 million trucking jobs by the end of 2009. This decrease of 200,000 drivers is significant not only for the truckers, but also for the manufacturers and merchants that sell the goods that these guys deliver.

You can see in the above chart that the severity of the decline in this recession (Green Line) is much steeper and prolonged than what it was in the prior two recessionary periods.

Who is (or isn't) Counted as Unemployed?

This little 2 minute video does a good job in explaining how the Bureau of Labor Statistics measures who is Unemployed, who is not in labor market, who is marginally in the labor market and who is working part time for economic reasons.

Only people who are "Unemployed" are counted in the (10%) unemployment rate. The other 3 categories may or may not be included in the U-6 Broader measurement of unemployment (~17%). The video pokes fun that the government would rather have the public and media focus on the smaller number in order to keep optimism high.

Michigan's U-6 Unemployment over 20%

According to mlive the broader level of unemployment in Michigan is over 21%.

For the 12 months from November 2008 to October 2009, Michigan had 21.1% of workers either out of a job, or working part time for economic reasons.

Of Michigan's 83 counties, unemployment ranges from ~6% (Mackinac) to ~25% (Baraga County).

Jobless Rate Doubles; Fannie & Freddie Delinquencies Septuple

Click on Chart for a Bigger Image

Here is an update of a set of data that I've been paying attention to for the last year. It compares the unemployment rate (Blue Line), the U6 Broader Unemployment Rate (Purple Line, which includes the jobless, and the people working part-time for economic reasons) with the delinquency rate on Fannie Mae (Red Bar) and Freddie Mac (Green Bar) mortgage loans on single family homes.

The picture isn't pleasing---You can see that as broad unemployment rate increased from less than 10% to 17.5% (in October, 2009)---The delinquency rate on home loans for Fannie & Freddie (which are typically Prime Loans) have increased by almost 6 - 8 Fold!

Let me repeat that---In Late 2006 and Early 2007, the prime mortgages were delinquent at merely ~0.5%. Now Freddie Mac has a 3.33% Delinquency Rate (September, 2009) and Fannie has a Delinquency Rate of 4.45%.

People should remember that in 2007, the economy & markets started tanking because sub-prime mortgages started going delinquent... Granted, those loans were going bust a significantly higher rate than the Freddie & Fannie notes---but also remember that Freddie & Fannie loan out significantly more money than what was ever given out to sub-prime borrowers... I don't have the data, but I'd venture to say that in order-of-magnitude--these loan delinquencies could be as bad or worse than the sub-prime crises.

Jobless Rate at 10.2%; Broader unemployment at 17.5%

Hat tip on the Chart to Jake at econopicdata

The jobless rate for October 2009 spiked to 10.2% and if you include the underemployed, it jumped to 17.5%---That's almost 1 out of every 5 workers is looking for a better job.

The average work week remained at a low of 33 hours a week (Usually employers will start increasing hours worked, before they start hiring new employees)...

U6 Unemployment Tops 17%

This morning the Bureau of Economic Analysis put out data concerning the unemployment rate for the United States during September 2009. The reported unemployment rate climbed to 9.8% in the most recent month, and the broader total unemployment (aka the U6 Unemployment) climbed to 17%--this figure includes people who are working part time for economic reasons.

EconomPicData does a great job of plotting all types of economic data and today I'm pulling a nice chart that he created that shows just how tightly correlated the Unemployment rate and the U-6 Unemployment rate are.Another disturbing trend that EconomPicData picks up on is the fact that the number of hours worked per week times the # of people employed divided by the population (essentially the number of hours per week worked per capital). And what is disturbing is that it is at a multi-decade low and still dropping; additionally, before companies start hiring new workers they usually start increasing the number of hours worked by their existing work-force.

August Unemployment Rate Increases to 9.7%, U-6 Unemployment Rate Nears 17

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Today, the Bureau of Labor Statistics stated that the seasonally adjusted unemployment rate in the United States increased 0.3 percentage points in August 2009 to 9.7%. This is the largest percentage of unemployed workers in America since 1983.

When you combine the unemployed with the underemployed, you get the U-6 unemployment rate--which increased to 16.8% in August 2009.

These two data points coupled with the fact that the average work week was just 33.1 hours in August 2009 means that there is a lot slack in the economy and even people with jobs may be nervous that they could lose them.

Unemployment Rate Drops in July

Today the Bureau of Labor Statistics reported that the seasonally adjusted unemployment rate for July 2009 actually went down vs. the prior month... The drop was 0.1 percentage point from 9.5% to 9.4%... What is interesting, however, is that the non-seasonally adjusted unemployment rate did not change---It held steady at 9.7% in both June and July.

Click on Charts for a sharper Image.

Additionally, the seasonally adjusted U-6 Unemployment Rate for July also went down (16.3% in July vs. 16.5% in June). However, the non-seasonally adjusted figure stayed at16.% in both June and July. There were two other bits of good news in this week's jobs report.

#1 It was the smallest amount of job losses in about 1 year (~250,000)

#2 The average work week climbed up 0.1 hours compared to the prior period---so the people with jobs are getting a few more hours.

1 in 6 American Workers Unemployed or Underemployed

The Bureau of Labor Statistics today reports that the unemployment rate was at 9.4%. This is the first time in 27 years that the unemployment rate has been since August 1983.
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The U6 unemployment rate, which includes people working part-time jobs even though they'd rather be working full time, has risen by 0.6 percentage points in the month to 16.4%---That means that 1 out of every 6 American workers are either out-of-work or working part time jobs even though they want to work full time.

Since the start of the recession in December 2007, the number of Americans unemployed have increased by 7 million! You can read the entire jobs report here.

Unemployment Rate Rises to 8.9% in April 2009--U6 Unemployment up to 15.8%

According to figures released from the bureau of labor statistics, the US unemployment rate increased from 8.5% in March 2009 to 8.9% in April 2009---losing 539,000 jobs in the process.

There are now 3.7 million people who have been unemployed for over a half year. This is up from 1.3 million people in the same position at the start of the "Great Recession" in 12/2007.

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One other interesting point is the fact that even though the unemployment increased by 0.4 percentage points in the month (8.5 to 8.9%), the U6 Unemployment Rate (which includes the unemployed as well as peole working part-time b/c they can't find full time work) increased only 0.2 percentage points (15.6 to 15.8%). Now maybe I'm being a pollyanna, but this is pretty good news--It means that the number of people who were working part time work, but wanted full time work actually fell!---I hope that means they found full time work, and not that they are now just happy with their part-time careers.
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Morningstar Analysts Discuss the Unemployment Rate

Although this clip is a couple of months old, the analysts at Morningstar do a good job at addressing issues with the unemployment, underemployment and temporary worker situation in the United States.

Almost 5 unemployed workers for every open job

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Looking at Data from the BLS.gov, I was able to compare the number of people unemployed (not seasonally adjusted--Shown in Blue) vs the number of job openings (shown in green) from 2000 to the Start of 2009. (The Data for job openings is only available up until January 2009, while the unemployment statistics are available through March, 2009).

I then took the ratio of the number of unemployed workers for every job opening (Right Hand Scale--Red Dashed Line). As you can see, from 2000 to 2007, there were usually between 1.5 to 2.0 unemployed workers for every job opening. As of January, 2009 there were 4.4 unemployed workers for every job opening.

And Given that

1. the unemployment rate increased almost 1 percentage point from January to March (causing the number of unemployed to grow by 7% in 2 short months).
2. The number of underemployed people has significantly grown in the last year
3. Odds are that there are fewer job openings in March, 2009 than in January 2009
4. Many of the job openings actually shown are probably not being promptly filled

I'd venture to say that there are easily 10+ job seekers for every actual job that needs to be filled... This creates a bad cycle for head-hunters & HR professionals---b/c if job lookers need to be applying to many more jobs to have a chance at being considered---so that means the number of resume's be received and reviewed for any job openings has grown by an order of magnitude since 2 years ago.

Another implication of this is, if every single job opening were filled tomorrow--Unemployment would only drop by ~20%---Meaning the unemployment rate would still be above 6.5%.

March 2009 Unemployment & Underemployment Chart

The author of economic pic data puts out a monthly chart that compares the unemployment rate to the underemployment rate. Note that this is a double-y-axis chart---But it's very interesting to see that rate-of-change of the two data sets seems to move in lock-step, and neither one has been slowing down yet.

If you enjoy following various tidbits of economic data, definitely add economic pic data to your blogroll.

13.2 million Americans are unemployed---Sets a record

The monthly jobs report just came out and showed an unemployment rate at 8.5% for the United States during March, 2009---This represents 13.2 million Americans out of work---The most jobless Americans since records have been kept in the 1940's (Note: That it's not the highest unemployment rate, because there are lot more workers in the US now than what there were in decades past).

The unemployment rate increased 0.4% from February's 8.1%... While the U-6 Unemployment Rate (Which includes the unemployed and underemployed) increased from 14.8% in February, 2009 to 15.6% in March 2009---The U6 Rate is up significantly from the 9.1% rate seen one year ago in March 2008

The number of people who lost jobs in January, 2009 was revised from below 700,000 to 741,000.

7.5 unemployed & underemployed people for every 1 available job

According to Data from the Bureau of Labor Statistics, there were over 4 unemployed people for every 1 job opening.

As of the end of January there were only 3 million job openings in the United States, while in February 2009 there were 12.5 million Americans unemployed and given that the U6 unemployment rate (which includes people who are working part-time, but want to work full-time was at 14.8% in February vs. the 8.2% headline unemployment rate, means that (roughly speaking) there are 7.5 (unemployed/underemployed) people looking for work for every 1 job opening.

But that is even better than what I expect is actually the case for 3 reasons

1. There are significant amounts of people with jobs that may be looking to switch jobs to a more secure company.
2. The "3 million job openings" data is for January, while the unemployment rate is February--Odds are this figure got lower in February & March.
3. Even if a company has a job opening, they may be acting very slowly to fill it...

So in my opinion, instead of 7.5 job seekers for every 1 job opening, there likely is really closer 15 - 20 people looking for every single job opening.

Unemployment Rate Surges to 8.1%, Underemployment Leaps to almost 15% in February 2009

According to the Bureau of Labor Statistics the unemployment rate in the US jumped to 8.1% in February---This is slightly worse than expectations, and the report also contained revisions to January and December 2008 that made the unemployment rates in those months higher as well. The 8.1% unemployment rate also marks the highest level seen in over 25 years.

In the last year, 5 million more Americans have become unemployed, an increase of 3.3 percentage points.

The U-6 unemployment figure (Which includes people who are working part-time but really want to work full time---sometimes called the underemployment figure) surged to 14.8% in February, up from 13.9% in January.

Executive Pay to Hourly Wage---A NY Times Story

It's important that behind every one of the millions of Americans that are counted as an unemployed or underemployed statistic is a person--a family who has there own unique experiences and challenges that they are facing during today's tough times.

The NY Times has an interesting article today that portrays several jobless people who are working either part-time or at low-paying hourly jobs (compared to their prior salaries), just to cover their expenses.

Tip for the unemployed--Shop around for your insurance

Odds are if you're unemployed or if you're afraid of the possibility of getting laid-off, you should look at various ways to spend less and save money---One very easy way to lower your expenses is to shop around for your insurance---Especially your auto-insurance.

If you used to drive 20 miles to work & 20 miles back home each day---That's 200 miles a week, or 10,000 miles a year! Call up your existing auto-insurer and tell them that you're driving fewer miles each year---This may reduce your premium. Once you get your new price from your existing auto-insurer, call 2 or 3 other car insurance companies get quotes and shop around! You could easily save a few hundred dollars a year if you recheck all your auto-insurance options when you're unemployed.

Unemployment/Underemployment Rates vs Freddie Mac and Fannie Mae Delinquency Rates

Given Barack Obama's Stimulus Package and efforts to curtail the amount of mortgage foreclosures that are occurring in the market place, I thought it would be an interesting exercise to compare the unemployment rate and underemployment (U6) rate in America with the mortgage delinquency rates that Freddie Mac and Fannie Mae are experiencing.

Looking at data for 2006 - 2008, you can see the impact of a vicious feedback cycle. As people get delinquent in their mortgages, banks and other investors have to write assets down and constrict credit, this feeds into the economic contraction which causes more companies to scale back on headcount and hours worked--causing increases in the unemployment rate and underemployment rate.


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In my opinion, as you look out into 2009 (and 2010) the economic contraction and credit crunch will continue to cost people their jobs--and this will cause an escalation in delinquent loans throughout 2009 and part of 2010---It will hit conforming loans, Alt-A loans, sub-prime and jumbo mortgages.

Expect Helicopter Ben to try and solve much of the problem by printing more money and trying to push long term rates near all-time lows.