Today while looking at the exhaustion rate the thought occurred to me that five or six months ago everyone and their dog (including me) were talking about the exhaustion rate.  Of course this was because in normal times no one looks at it as it rarely is at an extreme.  This time however it was hitting new highs.  After getting a lot of press for a few weeks the exhaustion rate kind of faded back into the depths of the Department of Labor stats department.

Why did it fade from glory?  As best I can tell it faded because it kept telling the same story month after month.  That story is the fact that the exhaustion rate has remained at its all time high levels for the past 10 months staying above 50 the whole time.  (Click on chart to enlarge)

Exhaustion Rate

After looking at the exhaustion rate I went over to the BLS stats that show how many people are unemployed and for how long.  First off  of course is the unemployment rate.  As you can see it is at 9.7% slightly down from the cycle high of 10.2%.  (Click on chart to enlarge)

Unemployment Rate

Next up is the number of people who have been unemployed for 15 weeks or more.  As you can likely guess from the exhaustion rate the number is quite high.  We took this number a step further and calculated the number of people unemployed for 15 weeks or more as a percentage of the labor force. As you can see in the chart below 5.78% of the labor force has been unemployed for 15 weeks or more.  (Click on chart to enlarge)

Unemployed 15+ Weeks Or More As A Percentage Of The Labor Force

Finally lets look at the number of people unemployed for 27 weeks or more as a percentage of the labor force.  As you can imagine by the previous charts, most notably the exhaustion rate, this number is quite high and is at all time highs almost double the previous peak. (Click on chart to enlarge)

Unemployed 27 Weeks Or More As A Percentage Of The Labor Force

So why aren’t these numbers with the exception of the unemployment rate getting much press lately?  Well there are likely a variety of reasons but the most likely reason I could come up with is that they have not changed.  The employment situation has been bad and getting worse for over a year now. So while they can try and spin the weekly initial claims number any way they want the underlying problems are not improving.  If this recovery is real, meaning we don’t fall into a double dip recession, then we are going to need to see more than just a token improvement in the employment numbers.

Happy Trading,

Dave@TheMacroTrader.com

P.S. The idea for weeks unemployed as a percentage of the labor force was from a chart we saw at EconomPic.  If you like mainstream and obscure economic numbers as well as different ways to look at them then you should mark Jakes site as a daily read.

Take a $1 trial of The Macro Trader to receive unbiased actionable research.

Bookmarks