Alternative Measures of Unemployment: U-6

The BLS data series that gets most of the press is the headline unemployment rate, or U-3 (seasonally adjusted). With the structural changes in the economy which would seem to result in undercounting issues in how U-3 is calculated, many folks have started giving U-6 some attention(U-6 casts the net very broadly, in particular folks who are involuntarily part time).

This plot is based on U-6 unadjusted, the year over year percent change in the value - so if the value in July, 2007 was 5% and then the value in July, 2008 was 6% this would be a 20% increase on this plot - declines in the unemployment rate would be a negative value. On a rate of change basis, we are where we were at around September, 2001 only with a U-6 value that is 10.8%(7/2008) instead of 8.2%(9/2001). The Federal Funds rate in 9/2001 started the month at 3.5%, ended the month at 3% on the way to 1%...

Riddle me this...

I have links below to source the material but here is one that might have kept the Sphinx whole...

The nominal GDP growth for 1Q2008 was $119.6 billion, represented as a real annualized GDP growth rate of 0.9%.

The nominal growth for 2Q2008 was $105.7 billion, represented as a real annualized GDP growth rate of 1.9%.

A nominal decline QoQ of 11.6% is equal to a real annualized QoQ increase in rate of 111% - that is some change in deflator kids! Can anyone clearly define what state change occurred to make that kind of change in the deflator? Anyone? Buehler?


http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
GROSS DOMESTIC PRODUCT: Second Quarter 2008 (Advance)
[snip]
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 3.0 percent, or $105.7 billion, in the second quarter to a level of $14,256.5 billion. In the first quarter,current-dollar GDP increased 3.5 percent, or $119.6 billion.
[snip]

http://www.bea.gov/newsreleases/national/gdp/2008/tech208a.htm
Technical Note Gross Domestic Product, Second Quarter of 2008 (Advance), July 31, 2008
[snip]
Real GDP
Real GDP increased 1.9 percent (annual rate) in the second quarter (that is, fromthe first quarter to the second), following an increase of 0.9 percent (revised) inthe first quarter.
[snip]

Real Estate Loan Delinquency Rates - CHGDEL update on rate of change

This is another bit of Fed data, though this is from the main FRB web site. This update is looking at the rate of change of the percent of real estate loans that are delinquent on a year over year basis...so if we go from 2% to 4% YoY that would be a 100% rate of change.

What we see is continued acceleration from the very low base we started from - the question is once this has been underway for awhile when will it start to slow down? If we get to 6% and a year later the rate is 9% that would be 50% on the plot, the rate of delinquency won't actually be improving until the line goes under the 0% baseline.

The Employment Spread Trade - CIVPART - EMRATIO update

What has happened in the last quarter is a continuation of the trend of a wider spread between the civilian participation rate (CIVPART from FRED) and the employed ratio of the population (EMRATIO again courtesy of FRED).



I am curious if there is a secular change in the works, as the spread since about 1980 has bottomed at a lower point in each expansion until the latest one...maybe related to the reduction in labor force participation by women that is occuring (no value judgement there, just the observation).