There's no big point to make here, just an observation. The unemployment rate is still low, and will likely remain low for the rest of the year. But it's definitely going up.
19 thoughts on “The unemployment rate is rising”
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Cats, charts, and politics
On the trajectory we're still looking at the end of the year before the Fed reduces interest rates.
And the projection is based on... what? A simple quadratic best fit? That seems... questionable.
Long term reality. AI integration will accelerate the end of more low-skill jobs. Lots of people just don't want to face that fact that we have a demand for high skill workers and a surplus of warm bodies that need income in order to survive.
And the other fact is that a whole lot of businesses think their workers are overpaid vs the value they deliver. Payroll is the biggest expense for most businesses. Figuring out how to slow the rate of wage growth and increasing output per worker is a big deal for most businesses. Eliminating head count is rewarded with bonuses, so the flogging will continue until morale improves.
Leaving us with the nagging problem of what do with the unemployables who still need food and shelter. Republicans can't wait to cut them off from benefits and will do so at the first opportunity. Our modern world is leaving a lot of people behind who can't survive in a hyper digital, fast paced, value creation environment -- but also refuse or are unsuited for work in the trades which are desperate for new blood.
CHICAGO —July Fourth was a violent 24 hours across Chicago. At least eleven people have been killed and over 50 hurt in separate shootings. Among the incidents, eight people being shot in the Little Italy neighborhood overnight.
It will sort itself out. With a little help from fentanyl.
Based on that curve, unemployment will exceed 100% in not too many years, and keep rising after that.
Really, Kevin, these simple curve-fitting examples are getting to be hilarious.
Since trump will be president in 7 months, one way or another, I’ve decided that the economy really sucks and we’re going to have a depression and market crash. Screw you people!
i actually think if unemployment is, say, 4.25, 4.3% when trump wins, & has gotten up to 5, 5.25, 6% by early into his term (say, may 2025), it might be our best chance to stop him. a lot of the benefit of the doubt he's getting about things being better under him than under biden is the momentum of the obama economy that he rode until the 'vid. he really was a do-nothing, policywise, president, on the economy, & i don't think he'd have the skill to pull America out of an unemployment spin. sure, he'd blame biden for having handedoff a mess -- in the inverse of not crediting obama for providing a good economy -- but the people would be able to see unemployment was 4.3 when biden left & 6.0 or 6.5 or 7 by fall 25 & start to think, "huh?"
Is that a quadratic curve? Unemployment is pretty complicated - maybe a cubic curve would be more predictive.
Actually a sine wave is the best fit.
It really is time for the Fed to start lowering the interest rates.
Their next FOMC meeting is at the end of July. I think this unemployment trend will tip the balance toward a quarter-point cut from that meeting.
Last I read, expectations are perhaps for September.
They're still about a year too late.
We need a housing market crash first. Prices are unsustainable, even at a lower interest rate. We are in a speculative bubble and it needs to pop, which it's starting to do in several local markets.
A speculative bubble? Maybe in some few high demand areas. But the reality is that housing housing supply to too small for the size population we have. This was true back in 2008 too. It's one reason we had no more than a moderate correction, not an utter collapse in housing prices (outside a handful of places). Housing is expensive because there's too little available.
Take a look at the chart. See the bubble ramping in 2002 - 2008, then popping. Now look at 2020-2024. You don't suddenly reach a point where there isn't enough housing like this, it grows over time - that's a speculative bubble. I can see it in listings since we're shopping. Lot's of properties bought in 20,21,22 and now on the market at double the selling price. The times the property went listed for rent is shown, but when it became an Airbnb isn't.
As the Airbnb bubble pops and the banks/PE firms who bought as speculation pop, prices will come down. The Fed just needs to not monkey with rates for another six months and let the air out of bubble.
https://fred.stlouisfed.org/series/csushpinsa
The financiers capitalize on our housing shortage, but they are not the cause of it.
Job growth exceeded replacement, but unemployment went up anyway. There are a few ways this could happen but most likely the number of people seeking jobs went up, because they see there are jobs available. Higher unemployment sounds bad, but in this case it isnt because people are losing jobs.
KD, would it hurt you to pay at least some attention to the Beveridge Curve?
Your pretty, CBO-like projection really misses the point of what's actually going on.
How does the Beveridge Curve derive the number of job vancancies? If it's by sampling job ads, that number may be way off. There's are too many fictitious listings online. It costs very little to advertise a job (unlike the days when a company had to take out a want-ad in a newspaper) and many jobs ads are on auto-pilot, constantly reposted even though the lob is long since filled.