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%!):
- 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.
- 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:
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.
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