Unemployment rate has grown to 8.1 percent the highest level in 25 years. The economy has lost 1.3 million jobs since the beginning of the year. Some sectors have been hard hit like manufacturing and trade, but education and health services has added 492 thousand in the last year and government has added over 150 thousand.
So is there anything good in the the BLS report?You have to look hard and be an optimist. At least survey estimates are not being overly surprised. The Labor Department diffusion index for private non-farm showed some improvement for February coming off the lows from December t a level of 23.8. The manufacturing index actually doubled albeit at a low extremely low level of 15.1. These low levels are extremely noisy but we will take what we can to figure out what is going on. The diffusion index looks at 278 industries and is centered at 50 when there is an equal balance between industries increasing and decreasing employment.
The issue is determining how extreme this recession will be and the chart provided from the WSJ suggests that we have seen worse since 1970. We are more used to the 1990 and 2001 shallow recession, but it does mean that there is little need for panic or for the use of words like unprecedented at this time. What is scary is that fiscal and monetary policy have already been coordinated and have tried to be stimulative yet we are still following an accelerating downward path.
So is there anything good in the the BLS report?You have to look hard and be an optimist. At least survey estimates are not being overly surprised. The Labor Department diffusion index for private non-farm showed some improvement for February coming off the lows from December t a level of 23.8. The manufacturing index actually doubled albeit at a low extremely low level of 15.1. These low levels are extremely noisy but we will take what we can to figure out what is going on. The diffusion index looks at 278 industries and is centered at 50 when there is an equal balance between industries increasing and decreasing employment.
The issue is determining how extreme this recession will be and the chart provided from the WSJ suggests that we have seen worse since 1970. We are more used to the 1990 and 2001 shallow recession, but it does mean that there is little need for panic or for the use of words like unprecedented at this time. What is scary is that fiscal and monetary policy have already been coordinated and have tried to be stimulative yet we are still following an accelerating downward path.
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