Thursday, October 15, 2009

The Unemployment Numbers

Reports state new unemployment filings continue to decline.

I expect to hear two diametrically opposed themes when the analyst and opinion makers get a hold of this story. One is Obama's stimulus is working. The other is Obama's stimulus is not working and the state controlled media is trying to spin what are awful stories into good stories.

I call BS on both.

Any trend before it can go in the reverse direction first has to slow down, stop, and then trend in the opposite direction. That is to say, before our economy can start adding jobs it must first lose jobs more slowly. In addition, we all have heard the arguments that unemployment is an awkward statistic. A person may fall out of the ranks of the unemployed because they have stopped looking, because their unemployment compensation is expired, or they have taken a new job. When a person gets a job, they just stop filing they don't give explicit alert to the change in their status. Pols, analysts, and economists then argue about the person's true status rather than knowing what it is.

Now, does Obama's stimulus have any hand in this reducing trend? Little if any, I see a crisis brought on by a bubble dynamic and it will take more than a sugar buzz to get us out of this situation.