Friday, July 8, 2011

38.5 Million Missing Jobs

Click to enlarge.

This chart shows the employment trend from 1939 to 2000. It also extrapolates that trend to the present.

This exponential trend has failed. No amount of wishful thinking is going to bring employment back to the trend line.

Click to enlarge.

This chart shows the difference between the long-term trend and our current non-farm payroll employment. We're 38.5 million jobs below trend now. That's up 300,000 from last month's 38.2 million missing jobs.

Captain Ben Bernanke thinks he can guide this economic ship into a safe harbor. It's going to be an adventure.

That's the way out. That's our only chance.
Don't listen to him! We've got to stay here 'til help arrives!
Help from where? From the captain? He's dead.

Source Data:
St. Louis Fed: All Employees: Total nonfarm


getyourselfconnected said...

I think the employment problem is structural and all the big players know it, but don't want to talk about it. If anything is going to cause a real change (like the whole financial system allegedly melting down did not) it will be S&P 500 at 2000 and unemployment at 12-15%. Not going to work well me thinks.

Stagflationary Mark said...


Robots. ;)

Stagflationary Mark said...

For those just tuning in, that's a gallows humor inside joke.

Watchtower said...

"There's got to be a morning after
If we can hold on through the night..."

Oops, feel-good soundtrack song is probably not going to be enough this time.

getyourselfconnected said...

I one up ya, dental practice robots!

LOL, my verification is:


Stagflationary Mark said...

Watchtower & GYSC,

The Morning After

We have a chance to find the sunshine
Let's keep on lookin' for the blight

Dammit! A "b" snuck in there!

MaxedOutMama said...

A few decades of playing the economic shell game will do that to any economy.

It's loss of production that has done this to us, and only gaining back production will help our jobs trend in the long term.

Just wait until people see Q2 GDP.

getyourselfconnected said...

MOM, I was told GDP would be 4% second half this year (lol) you have other ideas??

Stagflationary Mark said...


Just how many rolls of duct tape would it have taken to keep the Titanic afloat? The world will never know. Sigh.

Behold the power of the Internet. I searched for "duct tape economy" and this is what I got back.

We Don't Have an American Press, Instead We Have the Casey Anthony Reality Show

The real duct tape is over the mouths of anyone reporting our economy and jobs are being shipped out overseas.

Go figure.

mab said...

Speaking of gallows humor:

Maybe if we included jobs in our export numbers, the trade deficit wouldn't look so bad! D'oh!

Mr Slippery said...

This is one of my favorite charts that you create. Not encouraging, but still a favorite. Thanks.

Stagflationary Mark said...


Maybe if we included jobs in our export numbers, the trade deficit wouldn't look so bad! D'oh!

Great idea! If a college education is worth about a million extra dollars over a lifetime and we have a 10 trillion dollar cumulative trade defiict (adjusted for inflation) then...

The... math... almost... works. D'oh!

Mr Slippery,

Discouraging charts for the win/loss! Sigh.

MaxedOutMama said...

GYSC - yeah, something about the loss of 300K jobs, poor retail numbers, diesel demand down by over 5% YoY - those sorts of annoying little details.

Call me Ishmael, but I'd say GDP was worse than Q1 if they get the inflation adjustment right.

DARE I ask who came up with the 4% figure?

MaxedOutMama said...

Mark, I came over here hoping you had replaced the top post.

I know your graph is good. I know the picture it presents is real. I know we have got to pay attention to this stuff, because the more we don't the worse it gets. I shudder to think of the brilliant plan the Fed will come up with next.

But still, that graph hurts the eyes and the mind behind them.

Wisdom Seeker said...

The jobs produced by credit-driven artificial demand during the K-autumn bubble (dot-com bubble as well as housing) weren't sustainable. The wages were paid with malinvested funds.

I think Mark's exponential trend is very interesting, but when you think about it, there's no reason to have expected it to continue. Absent a huge immigration, the workforce growth rate had to decelerate due to demographic shifts, especially after the baby boomers finished entering the workforce around 1988.

Of course, the economics profession totally missed the implications of both of these... "black swans"???

But in this case, there aren't 38.5 million missing jobs, and that "normal" is just gone. It's about time we figured out what the new normal should be and planned appropriately!

Right now the total employment to total population ratio is only down about 3% from its bubble peak, and only off about 1.5% from the 20-year trailing average. That implies only 4 to 5 million "missing" jobs, even without a demographic shift:


If we do the ratio of total employment to "Civilian Noninstitutional Population" (those 16 and over), the picture is similar: down 6% from the bubble peak, down about 4.5% from 20 year average. Interestingly, the FRED data series don't seem to break down the civilian population any further by age.

The Employment Situation reports include data on ages 16-64 vs. 65 and over, and include more detailed data on agest 25-35, 35-45, 45-55, 55-65 etc., but I don't see a FRED sereis making it easy to plot that data. The civilian labor force between ages 16-64 is about 147,500,000, with another 52,500,000 not in labor force.

Anyway, if we remember that the over-65 group is increasing, and if we consider that the labor force from 16-25 may have been depleted because more jobs require more training now, and factor in immigration/emigration, it's quite possible that the rate of growth of the workforce is less than it used to be...

P.S. I happened to notice that the unemployment rate for U.S.-born workers is actually 9.5%, above the healine number, whereas the rate for foreign-born workers is 8.4%. Presumably because foreign-born workers (especially those who aren't yet permanent residents) are more likely to be forced to leave if they don't have jobs...

Wisdom Seeker said...

Followup: I wrote "Interestingly, the FRED data series don't seem to break down the civilian population any further by age."

The reason I think this is interesting is that it suggests that the Federal Reserve folks (and by extension the bulk of the econ profession) are totally unequipped to evaluate policy issues arising from the impact of population aging on the readily-available workforce, the cascade effects on GDP etc.

Consider the series CE160V: total civilian employment ... and by extension the Federal tax base. The sustainable level of CE160V depends not only on the total population over age 16 (CNP160V), but on the distribution of worker-age vs. retirement-age folks over age 16. But FRED doesn't track that data at all!

So if you just assumed that CE160V would track CNP160V, and saw CNP160V growing steadily, you would be in for a rude surprise if the bulk of the growth were in the over-55 group where workforce participation drops like a rock!

Given that there's a huge impact on what's sustainable economically, if CE160V is unlikely to grow without a huge immigration surge, this FRED blind spot is very disconcerting!

In other words, given that Uncle Sam's fiscal stability seems to be predicated on Mark's employment growth curve (in the sense that if we had those 38 million extra private-sector jobs paying taxes, we probably wouldn't have deficit problems), then we not only need to produce a lot more jobs, we also need to import a ton of workers!!

Alternatively, if we aren't going to have the workers and we can't create the jobs, then we'd better rescope Uncle Sam's mission and budget...

Watchtower said...

Mark, this is totally off topic, but...

getyourselfconnected said...

MOM, 4% is the FED's and some analysts figures when the second half acceleration happens any day now. Any day now.....

Stagflationary Mark said...


Mark, I came over here hoping you had replaced the top post.

I think I must subconsciously leave up the scariest charts longer. Either that or my sister is in town. Or both! ;)

Stagflationary Mark said...

Wisdom Seeker,

But in this case, there aren't 38.5 million missing jobs, and that "normal" is just gone.

I absolutely agree. I'm certainly not claiming that we can fill 38.5 million jobs with 14 million unemployed. That math can't work.

That's also why I put "normal" in quotes because some people seem to believe that things will return to the long-term trend (namely those such as Jeremy Siegel who base their future stock market predictions on 100+ years of historical data).

It's about time we figured out what the new normal should be and planned appropriately!

No joke!! Being a permabear is apparently my new normal.

Stagflationary Mark said...


That REQUIRES a hard link, lol.

Toilet paper wedding dress contest winners: 12 bridal gowns you could buy with a coupon

They called me crazy when I hoarded toilet paper. Mwuhahahaha! *evil mad scientist laugh*

Stagflationary Mark said...


That mythical 4% GDP growth was last seen courting unicorns in the land that Time (magazine) forgot. ;)

Watchtower said...

Mark you are ahead of the curve my man!

nanute said...

With all that toilet paper, "there's got to be a morning after." Right?

Stagflationary Mark said...

nanute & Watchtower,

Who cares about the morning after! I'm going to start cranking out my own line of 2-ply disposable swimsuits! There sure to be a hit this summer! Hahaha! :)

Jazzbumpa said...

Mark -

You sure found my post quickly. I've updated it with a rate-of-change graph, that makes the whole picture even more dismal.

watchtower -

Thanks -- that is awesome! You've given me my "What the Hell?!? Friday" post for the week.


Stagflationary Mark said...


You sure found my post quickly.

Luck of the (quick) draw! ;)