Saturday, March 7, 2009

U-6's Disturbing Seasonal Trend

U-6 non-seasonally adjusted has become my weathervane for employment distress, and there are two disturbing trends (in addition to the value being too damn high at 16%!):

  1. The rate of change reaccelerated (the second derivative increased) - we need to see that start to come down or at least stabilize for that light in the tunnel be daylight and not train.

  2. The seasonal trend should be for the absolute value to decline going into the first quarter, but it is not - it is increasing - not good.

This is what I am talking about - unfortunately, the time series is somewhat limited for U-6 - but as you can see, even through the last recession the seasonal pattern of a Month Over Month decline held. Things are different this time.

1 comment:

Mr. S said...

Energyecon - It would appear that we had similar ideas with respect to the unemployment number. I had a post here: U3:NSA-SA.

Same idea - the model is for "normal" employment times and it appears that when seasonal hiring does not take place the model assumptions are violated causing a large gulf between the SA and NSA values. This does not portend well for the headline number going ahead.